• Louise Thaxton

    Louise Thaxton

    Branch Manager
    NMLS# 69996

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    What is a Reverse Mortgage?

    A “reverse mortgage” allows people who are 62 and older to draw upon their home equity in order to receive a lump sum of money, a line of credit, or monthly loan proceed payments.
    Louisiana reverse mortgage

    Home Equity Conversion Mortgages

    The most common type of reverse mortgage is called a Home Equity Conversion Mortgage (HECM). HECMs are FHA-insured, which means the insurance comes into play if the loan is accelerated (called due) for one of the reasons listed below and the house isn’t worth enough to pay back the lender in full through a foreclosure sale. In those cases, the FHA will compensate the lender for the loss.

    How Does a Reverse Mortgage Work?

    In a regular “forward” mortgage, the borrower gets a lump sum of money from the lender, and then makes monthly payments towards repaying the money, including interest.

    In a reverse mortgage, rather than getting a lump sum that has to be steadily paid back, the homeowner typically receives periodic payments from the lender, which become the loan. Though, the lender’s payments to the borrower may be in the form of a lump sum (subject to some limitations), monthly payments, or a line of credit you can draw on as needed. You can also get a combination of monthly installments and a line of credit.

    Who Can Get a Reverse Mortgage?

    Reverse mortgages are generally available to any homeowner over the age of 62 who has substantial equity in the home. Reverse mortgages generally don’t require a credit or income test. However, they do require financial counseling from a HUD-approved HECM counselor.

    How Much Can You Borrow?

    The amount you can borrow is based on your home’s value, current interest rates, and your age. Also, there are limits to how much of your home’s value you can draw out.

    As of January 2020, the max claim amount with a HECM is $765,600. Also, a borrower may get only 60% of the loan at closing or in the first year, subject to a few exceptions

    *Copyright©2020 Fairway Independent Mortgage Corporation (“Fairway”) NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency. Reverse mortgage borrowers are required to obtain an eligibility certificate by receiving counseling sessions with a HUD-approved agency. The youngest borrower must be at least 62 years old. Monthly reverse mortgage advances may affect eligibility for some other programs. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Lender.

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    Contact Louise Thaxton

    Louise Thaxton

    104 East Texas St.
    Leesville, Louisiana 71446
    (318) 471-6480
    NMLS# 69996

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