What is a reverse mortgage and How does a reverse mortgage Arizona work?
Arizona as well as around the country is seeing a rise in reverse mortgages. Many of the baby boomer generation are now old enough to be eligible for a reverse mortgage. It is a mortgage loan that allows homeowners age 62 and older to access a portion of their home equity without having to make mortgage payments. It is estimated that in the state of Arizona, 14% of the population is over the age of 62 years old. The money that is taken out does not have any limitations or restrictions on how it can be used. The loan does not have to be repaid until you permanently move out, sell the home, or pass away.
What are the requirements for a reverse mortgage?
- You must be 62 years or older.
- You must live in it as your primary residence
- You must keep current on your property taxes and insurance
- You must keep the home properly maintained
How do I know how much I can borrow?
The amount the homeowner can borrow depends on:
- Age of the youngest borrower (minimum of age 62)
- Current interest rate
- Lesser of the appraised value of the home, the HECM FHA mortgage limit ($625,500 for all counties) or the sales price for purchase transactions.
So, the more valuable the home is, the older the borrower(s) are, and the lower the interest rate, the more that can be borrowed. If there is more than one borrower, the age of the youngest borrower is used to determine the amount eligible to borrow.
How are the funds disbursed?
- Funds are first used to pay off any existing mortgages or liens on the property.
- Remaining funds can be taken out in a lump sum, held in a line of credit or disbursed in monthly draws.
What are the steps to complete a reverse mortgage?
- Fill out the question form to the right above or give us a call located at the header or footer section of this page. We can answer your questions and let you know how much you qualify for.
- Complete HUD reverse mortgage counseling. We will provide a list of approved Arizona HUD counseling agencies, and you make an appointment with a counselor. Counseling may be done face-to-face or over the phone.
- Schedule a loan application appointment with us. Be sure to bring the following to your appointment:
- HUD counseling certificate
- Driver’s license or ID
- Social security card, Medicare card, or proof of social security number
- Current mortgage statement (if home currently has a mortgage)
- Homeowners insurance declaration page
- HOA statement or payment coupon (if home has a HOA)