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Caron

Reverse annuity mortgage (RAM) is a mortgage loan program designed specially for senior citizens. It allows them to borrow a certain amount against their home equity. The borrower receives monthly tax-free payments from the lender either in the form of periodic payments or from an annuity set up with the loan proceeds.

The borrower does not have to repay the loan till he sells off the property or if he wishes to move over to another place. In case he dies, his heirs will have to repay the principal balance along with the interest.

Reverse annuity mortgage is also known as reverse mortgage. The Home Equity Conversion Mortgage (HECM) is a special kind of reverse annuity mortgage approved by the US Department of Housing and Development (HUD).

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blue · Posted: Thu Dec 21, 2006 4:55 pm Post subject:

Hi Caron,

Let me provide some more inputs about Home Equity Conversion Mortgages.

To pay for HECM, there are two MIPs (Mortgage Insurance Premiums) which are collected-

An up front premium which can be financed by the lender amounting to 2% of the value of the home and
A monthly premium, the amount for which equals 0.5% per year value of the mortgage balance.

Also, the loan origination charges by any lender can vary, but the amount out of such charges that can be financed through HECM is limited to a maximum limit of $1,800.

The fees for appraisal and inspection set by HUD can be charged from borrowers but they are allowed to get finance for these charges also.

Thanks
Blue

Guest

how can I apply for hecm

colin · Posted: Sat Jan 20, 2007 12:16 pm Post subject:

Hi Vince,

Welcome to Mortgagefit forum.

If you fulfill the eligibility criteria for HECM then you should send your application through any FHA-approved lender. The lender then submits the your application for approval to the HUD Field Office in your region.

To know about the lenders who are approved by FHA then you can search the HUD listing: http://www.hud.gov/ll/code/llplcrit.html

Colin

Caron · Posted: Mon Jan 22, 2007 5:48 am Post subject: RE: applying for hecm

Hi Vince,

Welcome to our forums.

You can apply to an FHA approved lender for an HECM.

Our Community also has a group of lenders offering different types of loan programs. If you are interested to apply for an HECM, you may Request us for free consultation. As soon as we receive your request with the minimum details on your loan requirements, we shall froward it to our Community lenders. The lenders may conatct you if their profile matches with your reuqirements.

Thanks,

Caron.

thepatjohn · Joined: 27 Aug 2009 Posts: 2 1.42 Dollars($)

Is it safer with a fixed annuity or a variable rate?

harrywallace07 · Joined: 25 Aug 2009 Posts: 42 -0.10 Dollars($)

it allows an elderly person to live off the equity in a fully paid-for house. Such a homeowner would enter into a reverse annuity mortgage agreement with a financial institution such as a bank, which would guarantee a lifelong fixed monthly income in return for gradually giving up ownership of the house. The longer the payments continue, the less equity the elderly owner would retain. At the owner's death the bank gains title to the real estate, which it can sell to offset outstanding claims.

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