Texas Reverse Mortgage Loan
Take the equity and enjoy retirement with the Texas Reverse Mortgage Loan
Find out how you can live your best life by qualifying for this type of loan in
Houston and across Texas.
Texas residents who are 62 or older may qualify for a Texas reverse mortgage loan.
If you have paid off most of your mortgage, a reverse mortgage allows you to use your home’s equity to withdraw cash in a variety of payout options.
This means you can better enjoy your retirement with the help of a reverse mortgage loan.
Homeowners in Houston, Texas, may want to apply for a Texas reverse mortgage.
However, there are a few things you should know before you apply.
Whether or not a reverse mortgage is the right financial option for you is a very personal decision and is based on many factors.
Your Guide to the Houston Reverse Mortgage
If you’ve almost paid off your Texas mortgage, a reverse mortgage may be right for you and your family.
In order to get a reverse mortgage loan, you’ll need to apply and provide details and documentation to your lender. The information you provide will help them determine how much you are qualified to borrow.
If you need money to fund your golden years, a reverse mortgage may be able to help you. Here’s how it works.
Over the life of your mortgage, the payments you’ve made on your home have translated into equity. A reverse mortgage enables borrowers to convert part of that equity in their home back into cash.
Though you’ll still pay your property taxes and homeowners insurance, you don’t have to make monthly loan payments. Proceeds are typically tax-free. And you won’t owe any interest until the home is sold.
This can be a great way to secure a steady stream of cash.
And no matter how large the loan balance, you or your heirs will never have to pay more than the appraised value of the home or the sale price.
Today's Mortgage Rates for
Conventional 15 Yr.
5.499%
Conventional 30 Yr.
6.399%
FHA 30 Yr.
5.799%
VA 30 Yr. Fixed
5.999%
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Rate Table Assumptions
Mortgage rates are subject to change and are not guaranteed. The rates may vary based on credit score, loan amount, and other factors.
Loan amounts greater than $475,000. FICO credit score greater than 780 or higher. Owner Occupied
30 Conventional Year Fixed - $475,000 or greater . LTV 75.0%. 1 % Point Charged.
15 Year Fixed - $475,000 or greater. LTV 95%. 1 Point.
30 Year Jumbo Loan - $800,000 or greater. LTV 75.0%. 1 Point.
30 Year FHA Loan - $475,000. LTV 96.5%. 1 Point charged
30 Year VA Loan - $475,000. 100.0% 1 Point.
The Potential Downside of a Texas Reverse Mortgage
While a reverse mortgage may sound like a good idea for everyone over 62, there are important considerations before you take out a reverse mortgage loan.
To ensure you understand the options and terms, all reverse mortgage borrowers are required to meet with a HUD-approved third-party counselor.
For example, if you pass away before you sell your house, your children or heirs would be responsible for selling the home or repaying the loan.
Potential downsides can include upfront and ongoing costs, a variable interest rate, an ever-rising loan balance, and a reduction in home equity.
Therefore it’s important to work with a reputable lender and a certified counselor before signing any contracts.
With a reverse loan, once the last surviving borrower dies, sells your home, or no longer resides there, you or your estate will be responsible for the repayment of the money you received, plus interest and other fees.
However, any remaining equity will belong to you or your heirs.
With a non-recourse loan, the lender can only be repaid from the proceeds of the sale of the home and not more than the value of the home.
Therefore, even if the home decreases greatly in value, the maximum repayment amount can only be up to the value of the home.
Thus, counseling is required with an independent third-party HUD-approved counselor to protect borrowers from receiving incorrect information about reverse mortgages.
So while reverse mortgages can seem a bit financially complicated, they do offer a few benefits for some homeowners.
Houston Reverse Mortgage Types
There are three main types of reverse mortgages you can apply for.
1. Single-Purpose Reverse Mortgage
State and local government agencies may offer reverse mortgages, but there are restrictions on how you can spend your loan money when you take out a single-purpose reverse mortgage.
You may need to make home repairs or pay property taxes. These essential expenditures can be paid for with the help of a single-purpose reverse mortgage loan.
Travel, entertainment, and personal expenses are out of the question. This type of loan can be a life-saver for seniors who are short on cash.
2. HECM Reverse Mortgage
Home Equity Conversion Mortgages are the most common reverse mortgages. These mortgages are only offered by Federal Housing Administration (FHA) approved lenders.
HECM reverse mortgages were first offered in 1988 to help seniors pay their bills.
With a HECM loan, you choose how you want to withdraw your funds. This can be in a fixed monthly amount or a line of credit or a combination of both.
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.
HECMs tend to carry very high origination, mortgage insurance premiums, and maintenance fees.
3. Proprietary Reverse Mortgage
Privately-owned companies in Houston may offer reverse mortgages. You can typically qualify for a higher loan amount when you choose a proprietary reverse mortgage, but the interest rates can be outrageous.
Some companies may allow you to borrow more than the equity in your home or the federal amount. This puts you at a greater risk of falling into a debt trap you’ll never escape.
Texas Reverse Mortgage Loan Requirements
Reverse mortgage applicants must meet the following requirements.
- You are at least 62 years old.
- Your home is paid off or almost paid off (typically at least 50% equity or more).
- You don’t owe any debt to the federal government.
- The home is your primary residence.
- You are able to continue to pay insurance, property taxes, and other home-related expenses.
Final Word on Reverse Mortgages
Although reverse mortgages can be helpful in some scenarios, it’s important to understand your options and terms in order to make the best choice for you and your family.
If you're an older homeowner who plans to stay put in your residence, a reverse mortgage may be a sensible way to help fund your later years. This is especially true for seniors whose spouses are also over age 62 and can be listed as co-borrowers on the loan.