Any interest rate that changes periodically based on published market rates.
A contract (usually designed by an insurance company) that provides cash payments in a specified period of time.
The estimated amount of a home’s value based on its characteristics and the market rate or market value in the area.
Appreciation is the increase in home value over time.
Calculator / Reverse Mortgage Calculator
A Reverse Mortgage Calculator is a tool that calculates how much money you could borrow with a Reverse Mortgage including information on interest rates, costs and more.
The finalizing of a reverse mortgage; this is the time when documents are signed and the three day rescission period begins.
Closing costs on a Reverse Mortgage are the costs a borrower must pay to secure a Reverse Mortgage. These fees may include an origination fee, title insurance, appraisal, escrow or settlement charges, flood certification, credit report and more.
A credit account, or line of credit, allows the borrower to receive money from the lender at the borrower’s intervals and amounts.
Deferred Payment Loans
A loan that gives the borrower an amount of money which has to be paid back at a certain point in the future. For example, payments on a reverse mortgage are deferred until death, sale of home or a permanent move.
The decrease in value in a home over time.
Fixed Monthly Loan Advances
A certain amount of money that is made to a borrower from a lender each month.
The appraised value of a home minus any outstanding loans on the home. If property value decreases or a loan is not repaid monthly as with reverse mortgages, you could have less home equity in the future.
Home Equity Conversion Mortgage (HECM)
Home Equity Conversion Mortgages are the most popular type of reverse mortgage. They allow seniors 62+ to convert the equity in their home to cash. The amount that may be borrowed is based on the age of the borrower in addition to the appraised value of the home. There are no required payments until the home is sold or the borrower(s) pass away, at which point the mortgage must be repaid.
Home Equity Loan
An agreement in which a home is used as collateral for a loan. Reverse mortgages are home equity loans as you borrow from the equity in your home.
A lien is a legal claim against property that acts as security against payment of debts.
Loan amount is the term that refers to the actual amount you are eligible to borrow with a Reverse Mortgage.
A single advance for the amount due; in relation to reverse mortgages it’s a loan advance paid at closing.
The portion of the interest rate on an adjustable-rate mortgage that is over and above the index rate.
The point in time when a debt or loan must be repaid. (i.e.: sale of the property, death of the last homeowner or non-payment of property taxes, etc.)
This is a Reverse Mortgage payout option that combines a line of credit with monthly payments.
A secured loan used to finance a property whereby the borrower is obliged to pay back collateral to the lender in the event that they stop making payments.
Mortgage insurance is a policy that protects lenders against losses that result from defaults on home mortgages.
A fee charged by the lender for processing an application and making the reverse mortgage loan (whether financed into the loan or out of pocket).
The money from your HECM Reverse Mortgage can be disbursed to you via cash (you receive the payout in full to your bank account or check), monthly payments or a line of credit.
A primary residence is defined as the property you occupy for more than 50% of the year. A Reverse Mortgage can only be taken on a primary residence.
A reverse mortgage is a loan that allows seniors 62+ to convert the equity in their home to cash. The amount that may be borrowed is based on the age of the borrower in addition to the appraised value of the home. There are no required payments until the home is sold or the borrower(s) pass away, at which point the mortgage must be repaid.
Right of Rescission
The right of a borrower to cancel a loan within three business days of closing or document signing without penalty.
Regarding a Reverse Mortgage, Tenure Option refers to a payout option for your loan. The Tenure Option gives you equal monthly payments for as long as you occupy your home.
This is a Reverse Mortgage payout option that pays you equal monthly payments for a fixed period of time.