What is a Reverse Mortgage?

The Department of Housing and Urban Development (HUD) of the United States has developed a federally-insured private loan referred to as the Reverse Mortgage program. The program enables elderly Americans to apply for a safe loan plan as a means to provide financial security. Reverse mortgage promises to provide funds for elders’ social security, help seniors be financially prepared in times of medical emergencies, and tries to assist elderly Americans be financially able to pay for extra expenses such home improvement endeavors.

Numerous Americans have already looked into the reverse mortgage program. It is important to learn about the basic information of the program to understand its benefits. Learning more about reverse mortgages will better enable individuals to see if the program is best fit for their needs.

Reverse mortgage simply allows homeowners who avail for the program to transfer their home equity into cash. The most attractive part of the program is that the homeowner is not required to pay for the loan while the house is the primary residence of the borrower. No other loan program carries this benefit.

HUD’s Federal Housing Administration states that the mortgage qualification is limited to certain requirements. Candidates eligible for the program are American individuals aged 64 years and older, have a low mortgage balance during the time of application which can be easily paid with the proceeds received from the home equity loan; or those who already fully own their home. HUD also requires for the borrower to be living in the home during the enrollment of the program.

HUD is not strict on the types of homes eligible for the program. It is just important that the borrowers own the home they are enrolling into the program. The house can be a detachable house, a condo, a manufactured house, townhouse, or a four-unit house. HUD also does not require the house to be mortgaged by certain lenders. To ensure the safety of the home equity loan, HUD thoroughly examines that the loan provided to the individuals will never go over the total value of the house enrolled in the program. This is considered a safety net, to make sure that the borrowers will not receive more loan than they can afford to pay.

The appraised value of the house enrolled in the program is the determining factor for the amount of money that can be loaned. Other minor factors also include the location of the property and the age of the borrower. There are services that can help individuals attain reverse mortgage loans.  However, it is best to first find legal aid on attaining the reverse mortgage loan to ensure more clarity and transparency. Alexander J. Chaudhry is a well renowned lawyer with over 15 years of legal practice. Mr. Chaudhry is currently working with Ali Farahpour, CEO of FNC Title Services LLC, as a means to provide legal services to title insurance agencies and professionals. Make a visit to FNC Title Services to attain legal aid regarding reverse mortgages.


About alifarahpour

Ali Farahpour is the founder and president of FNC Title Services, LLC. Farahpour has nearly 20 years of experience in residential and commercial real estate settlements, with a focus on serving senior citizens through home equity conversion mortgage (“HECM”) transactions. He is a resident title insurance producer for Maryland and in addition holds several individual title insurance licenses throughout the country. More recently, Mr. Farahpour focused his skills on serving the reverse mortgage industry. In 2007 he founded FNC Title Services, LLC, a multi-state title insurance agency that specializes in closing HECM transactions. As a means to better serve his clients, Mr. Farahpour developed on-line systems that allow FNC clients to generate fees, GFEs and open and track title orders. Clients are able to close loans throughout the nation and are guided by specific FNC divisions dedicated to reverse mortgages. Mr. Farahpour runs FNC Title Services, LLC from its corporate headquarters in Rockville, Maryland and lives with his family in Bethesda, Maryland. You can read more about FNC at www.fnctitle.com
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