Adirondack Country Homes Realty Inc.

      Serving the "Entire" Adirondack Park with offices at:

         Schroon Lake Region (Main Office):  PO 488, 1098 US Route 9, Schroon Lake, NY 12870 * 518.532.7900

         High Peaks Region/Auction Sales:  2918 US Route 9, North Hudson, NY 12855 * 518.532.9323

         Lake Champlain Region:  25 Munsey Way, Elizabethtown NY  12932  * 518.569.8884

         Lake George:  2022 State Route 9, Lake George, NY 12845  *  518.668.2677

         North Country Region:  113 Flynn's Line Road, Burke, NY 12917  * 518.483.4538 

         Speculator Region:  Route 30, Speculator, NY 12164  *  518.569.8884 

         Washington Country Region:  4156 County Route 30, Salem, NY 12865 * 518-854-3294

 

 

 

FHA Reverse Mortgages (HECMs)

 

FWT Homepage Translator

 Reprint of HUD

 

If you are a homeowner age 62 or older and have paid off your mortgage or paid down a considerable amount, and are currently living in the home, and are eligible, you may participate in FHA's Home Equity Conversion Mortgage (HECM) program.  The HECM is FHA's reverse mortgage program that enables you to withdraw some of the equity in your home with limitations or a single disbursement lump-sum payment at the time of mortgage closing.

 

You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

 

 

How the Program Works

 

There are many factors to consider before deciding whether a HECM is right for you.  To aid in this process, you must meet with a HECM counselor to discuss program eligibility requirements, financial implications and alternatives to obtaining a HECM and repaying the loan. Counselors will also discuss provisions for the mortgage becoming due and payable.  Upon the completion of HECM counseling, you should be able to make an independent, informed decision of whether this product will meet your specific needs.

There are borrower and property eligibility requirements that must be met.  You can use the listing below to see if you qualify. If you meet the eligibility criteria, you can complete a reverse mortgage application by contacting a FHA-approved lender.  You can search online for a FHA-approved lender or you can ask the HECM counselor to provide you with a listing.  The lender will to discuss other requirements of the HECM program, the loan approval process, and repayment terms. 

 

 

Borrower Requirements

 

YOU MUST ....

  • Be 62 years, or older

  • Own the property outright or paid-down a considerable amount

  • Occupy the property as your principal residence

  • Not be delinquent on any federal debt

  • Have financial resources to continue to make timely payments of ongoing property charges such as property taxes, insurance and homeowner's association fees, etc.

  • Participate in a consumer information session given by a HUD-approved HECM Counselor

Property Requirements

 

     The following eligible property types must meet all FHA property standards and flood requirements:

  • Single family home or 2-4 unit home with one unit occupied by the borrower

  • HUD-approved condominium project

  • Manufactured home that meets FHA requirements

 

Financial Requirements

     For adjustable interest rate mortgages, you can select one of the following payment plans:

  • Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence

  • Term - equal monthly payments for a fixed period of months selected

  • Line of Credit - unscheduled payments or in installments, at times and in an amount of your choosing until the line of credit is exhausted.

  • Modified Tenure - combination of line of credit and scheduled monthly payments for as long as you remain in the home

  • Modified Term - combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.

     For fixed interest rate mortgages, you will receive the Single Disbursement Lump Sum payment plan.

 

 

Mortgage Amount Based On

 

     The amount you may borrower will depend on:

  • Age if the youngest borrower

  • Current interest rate

  • Lesser of appraised value or the HECM FHA mortgage limit of $625,500 or the sales price; and

  • Initial Mortgage Insurance Premium

 

HECM Costs

You can pay for most of the costs of a HECM by financing them and having them paid from the proceeds of the loan. Financing the costs means that you do not have to pay for them out of your pocket. On the other hand, financing the costs reduces the net loan amount available to you.

The HECM loan includes several fees and charges, which includes: 1) mortgage insurance premiums (initial and annual) 2) third party charges 3) origination fee 4) interest and 5) servicing fees. The lender will discuss which fees and charges are mandatory.

You will be charged an initial mortgage insurance premium (MIP) at closing.  The initial MIP will be .5 percent or 2.5 percent, depending on your disbursements.  Over the life of the loan, you will be charged an annual MIP that equals 1.25% of the mortgage balance.

  1. Mortgage Insurance Premium
    You will incur a cost for FHA mortgage insurance.  The mortgage insurance guarantees that you will receive expected loan advances. You can finance the mortgage insurance premium (MIP) as part of your loan.

  2. Third Party Charges
    Closing costs from third parties can include an appraisal, title search and insurance, surveys, inspections, recording fees, mortgage taxes, credit checks and other fees.

  3. Origination Fee
    You will pay an origination fee to compensate the lender for processing your HECM loan. A lender can charge a HECM origination fee up to $2,500 if your home is valued at less than $125,000. If your home is valued at more than $125,000 lenders can charge 2% of the first $200,000 of your home's value plus 1% of the amount over $200,000. HECM origination fees are capped at $6,000.

  4. Servicing Fee
    Lenders or their agents provide servicing throughout the life of the HECM. Servicing includes sending you account statements, disbursing loan proceeds and making certain that you keep up with loan requirements such as paying real estate taxes and hazard insurance premium. Lenders may charge a monthly servicing fee of no more than $30 if the loan has an annually adjusting interest rate and $35 if the interest rate adjusts monthly. At loan origination, the lender sets aside the servicing fee and deducts the fee from your available funds. Each month the monthly servicing fee is added to your loan balance. Lenders may also choose to include the servicing fee in the mortgage interest rate

 

 

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RESOURCES

Helpful Booklet from National Council of Aging (click here)

FHA Fact Sheet (click here)

AARP Booklet on Reversed Mortgages (click here)

~~~~

 

Frequently Asked Questions

About HUD's Reverse Mortgages

 

Reprint from HUD.org

 

The Home Equity Conversion Mortgage (HECM) is FHA's reverse mortgage program, which enables you to withdraw some of the equity in your home.  The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement Social Security, meet unexpected medical expenses, make home improvements and more.  You can receive additional free information about reverse mortgages in general by contacting the National Council on Aging at (800) 510-0301 or downloading their free booklet, "Use Your Home to Stay at Home," a guide for older homeowners who need help now. It is smart to know more about reverse mortgages, and decide if one is right for you!

1. What is a reverse mortgage?

A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you.  However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage.  You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

2. Can I qualify for FHA's HECM reverse mortgage?

To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, have the financial resources to pay ongoing property charges including taxes and insurance, and you must live in the home. You are also required to receive consumer information free or at very low cost from a HECM counselor prior to obtaining the loan.

3. Can I apply for a HECM even if I did not buy my present house with FHA mortgage insurance?

Yes.  You may apply for a HECM regardless of whether or not you purchased your home with an FHA-insured mortgage. 

4. What types of homes are eligible?

To be eligible for the FHA HECM, your home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.

5. What are the differences between a reverse mortgage and a home equity loan?

With a second mortgage, or a home equity line of credit, borrowers must make monthly payments on the principal and interest.  A reverse mortgage is different, because it pays you there are no monthly principal and interest payments.  With a reverse mortgage, you are required to pay real estate taxes, utilities, and hazard and flood insurance premiums.

6. Will we have an estate that we can leave to heirs?

When the home is sold or no longer used as a primary residence, the cash, interest, and other HECM finance charges must be repaid.  All proceeds beyond the amount owed belong to your spouse or estate.  This means any remaining equity can be transferred to heirs.  No debt is passed along to the estate or heirs.

7. Should I use an estate planning service to find a reverse mortgage lender?

FHA does NOT recommend using any service that charges a fee for referring a borrower to an FHA-approved lender.  You can locate a FHA-approved lender by searching online at www.hud.gov or by contacting a HECM counselor for a listing (see below local directory).  Services rendered by HECM counselors are free or at a low cost. 

8. How do I receive my payments?

You may be eligible for one of the following payment plans:

 9. What if I change my mind and no longer want the loan after I go to closing?  How do I do this?

By law, you have three calendar days to change your mind and cancel the loan.  This is called a three day right of rescission.  The process of canceling the loan should be explained at loan closing.  Be sure to ask the lender for instructions on this process.  Mortgage lenders differ in the process of canceling a loan.  You should ask for the names of the appropriate people, phone numbers, fax numbers, addresses, or written instructions on whatever process the company has in place.  In most cases, the right of rescission will not be applicable to HECM for purchase transactions.

 

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HECM Counselors In, And Around, the Park

AFFORDABLE HOUSING PARTNERSHIP

 

Phone: 518-434-1730
Website:
www.ahphome.org

 

255 Orange St
Albany, New York 12210-2400

 

CLEARPOINT CREDIT COUNSELING SOLUTIONS -ALBANY BRANCH

 

Phone: 518-482-2227
Toll-free: 315-474-6026
Fax: 855-224-1368
E-mail:
info@CreditHelpNY.org
Website:
www.clearpointccs.org

 

2 Computer Dr W
Albany, New York 12205-1622

 

NY STATE OFFICE FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES

 

Phone: 518-473-1973
Fax: 518-474-0783
E-mail:
Lucinda.Griffin@opwdd.ny.gov
Website:
www.opwdd.ny.gov

 

44 Holland Avenue
ALBANY, New York 12208-3411

 

HOUSING ASSISTANCE PROGRAM OF ESSEX COUNTY

 

Phone: 518-873-6888
 

 

PO Box 157
Elizabethtown, New York 12932-0157

 

FRIENDS OF THE NORTH COUNTRY

 

Phone: 518-834-9606
Website:
https://www.friendsofthenorthcountry.org

 

PO Box 144
Keeseville, New York

 

FRANKLIN COUNTY COMMUNITY HOUSING COUNCIL

 

Phone: 518-483-5934
Fax: 518-483-0984
E-mail:
fcchc1@yahoo.com


 

337 West Main Street
MALONE, New York 12953-1751

 

COMMUNITY ACTION PROGRAM FOR MADISON COUNTY

 

Phone: 315-684-3144
Toll-free: 315-684-3144
Fax: 315-684-9650
E-mail:
mryberg@capmadco.org
Website:
www.capmadco.org/

 

PO Box 249
Morrisville, New York 13408-0249

 

OPPORTUNITIES FOR CHENANGO, INC.

 

Phone: 607-336-2101
Website:
www.ofcinc.org

 

PO Box 470
Norwich, New York 13815

 

OSWEGO HOUSING DEVELOPMENT COUNCIL, INC.

 

Phone: 315-625-4520
Toll-free: 866-706-2679
Fax: 315-625-7347
E-mail:
oswegohousingdevelopmentcouncil@yahoo.com
Website:
www.ohdcinc.org

 

2944 EastMain Street
PARISH, New York 13131

 

BETTER NEIGHBORHOODS, INCORPORATED

 

Phone: 518-372-6469
Fax: 518-372-6460
E-mail:
eaugust@better-neighborhoods.org
Website:
www.better-neighborhoods.org

 

986 Albany Street
Schenectady, New York 12307-1513

 

TROY REHABILITATION AND IMPROVEMENT PROGRAM

 

Phone: 518-690-0020
Fax: 518-690-0025
E-mail:
bobbi@triponline.org
Website:
www.triponline.org

 

415 River Street
TROY, New York 12180-2834

 

CLEARPOINT CREDIT COUNSELING SOLUTIONS - WATERTOWN BRANCH

 

Phone: 315-788-2227
Toll-free: 804-772-6894
Fax: 855-622-9023
E-mail:
info@CreditHelpNY.org
Website:
www.clearpointccs.org

 

215 Washington Street
Watertown, New York 13601-3329

 

NEIGHBORS OF WATERTOWN, INC. Phone: 315-782-8497
Website:
www.neighborsofwatertown.com
112 Franklin Street
Watertown, New York 13601-3318

Directory accurate as of 6/30/2014

 

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