In contrast, reverse mortgages on Colorado homes do not require such evidence. Colorado home mortgages, or forward mortgages in this context, commonly require substantial indications that an applicant will be able to make payments on their home loans.
Additionally, most reverse mortgages are federally insured and offer Colorado homeowners and heirs additional benefits. One FHA product, the HECOM, is used for 95 percent of all reverse mortgages. This product requires only proof of age (must be 62 years old to apply), proof that the applicant lives in the home, and record of equity built up in the property. Consequently, Colorado reverse mortgages are often a better choice for those who qualify.
Traditional loan costs increase over time; reverse mortgage costs decrease. To calculate the Total Annual Loan Cost or TALC, ask your mortgage professional for a helpful form similar to the APR of a traditional loan.
Facts about Forward Mortgages
When applying for forward home loans, applicants must show proof of income and assets. Lenders require good credit ratings as well as total debt limits. The borrower pays upfront costs, such as closing costs and down payments, and the monthly house payment. The homeowner is responsible for taxable income and property taxes.
If a borrower defaults on a traditional loan or passes away, he and/or his heirs are responsible to honor the loan contract. If the home depreciates, the borrower absorbs the hit.
Facts about Reverse Mortgages
The HECOM federally insured mortgage does not require proof of income or assets or credit minimums. It does not require repairs to be completed before the loan goes through. In fact, there are no upfront costs, except the title costs, which are usually higher because of the increased risk to an investor. Those can be wrapped into the reverse mortgage product. The homeowner must pay for an appraisal; the cost ($400 to $500) can usually be drawn against future payments.
There are no prepayment penalties for the borrower and there are many payment choices. The borrower can receive payouts in monthly installments or in a lump sum. If not needed during any time, the payments can also be suspended. If the property value happens to go down, the insurance makes up the difference.
For information about creative solutions for home loans, reverse mortgages, and other mortgage products used to develop housing, businesses, industries, and cooperatives, call Taylor Mortgage Group LLC at 303-339-5950.