PinellasHomeFinance.com

First Time Home Buyer's: Many first time home buyers have special needs. To help them get financing, Down Payment Assistance Programs are available from a variety of sources: Cities, counties, registered charities such as "AmeriDream" and others. Also, FHA financing allows "gift money" from relatives, and other qualified sources. Often, these programs allow the seller to pay all of the buyer's closing costs. (Up to 6% of purchase price). FHA financing is not credit score driven, however the guidelines are rigid and the loan amounts are limited. FHA loans are insured by the government and the loan limits vary, county by county. Currently the FHA loan limit for Pinellas County is - $292,500.00 Typically the interest rates on these loans are comparable to conventional financing.

VA Financing: VA financing is available to all veterans who possess a valid certificate of eligibility. VA loans are "guaranteed" by the government. They allow veterans to purchase a home with zero money down. The standard loan limit is $417,000.00 but veterans can put down money and get larger loans. Just like FHA, the interest rates are similar to conventional rates.

Conventional Financing: This type of loan is the standard by which all others are compared. Common characteristics of this loan are as follows:

• A fixed Interest Rate
• A 15 or 30 Year Term (re-payment period)
• No Pre-Payment Penalty
• Loan Payments are fixed

Jumbo Loans: Loans higher than $417,000.00. These loans ussually come with a higher interest rate due to the higher risk to the lender.

Stated Income Loan: All loans require some form of documentation by the lender to prove the credit-worthiness of the borrower. Stated Income loans allow a person with good credit and good employment history to borrow money without proving their income. They simply "state" their income on the application.

2nd Mortgages: These loans come in two basic categories,

a.) A fixed rate closed-end loan. (You get all the money in the beginning.)

b.) A home equity line of credit - open ended. (You don't have to take all the money in the beginning and as you pay it back you can always re-borrow it.)

Reverse Mortgage: For Senior Citizens 62 and Older.

1. What is a reverse mortgage?

A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. HUD's reverse mortgage provides these benefits, and it is federally-insured as well.

2. Can I qualify for a HUD reverse mortgage?

To be eligible for a HUD reverse mortgage, HUD's Federal Housing Administration (FHA) requires that the borrower is a homeowner, 62 years of age or older; own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and must live in the home. You are further required to receive consumer information from HUD-approved counseling sources prior to obtaining the loan. You can contact the Housing Counseling Clearinghouse on 1-800-569-4287 to obtain the name and telephone number of a HUD-approved counseling agency and a list of FHA approved lenders within your area.

3. Can I apply if I didn't buy my present house with FHA mortgage insurance?

Yes. It doesn't matter if you didn't buy it with an FHA-insured mortgage. Your new HUD reverse mortgage will be a new FHA-insured mortgage loan.

4. What types of homes are eligible?

Your home must be a single family dwelling or a two-to-four unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-approved. It is possible for individual condominiums units to qualify under the Spot Loan program.

5. What's the difference between a reverse mortgage and a bank home equity loan?

With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments. The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. You don't make payments, because the loan is not due as long as the house is your principal residence. Like all homeowners, you still are required to pay your real estate taxes and other conventional payments like utilities, but with an FHA-insured HUD Reverse Mortgage, you cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment."

6. Can the lender take my home away if I outlive the loan?

No! You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than your home's value.

7. Will I still have an estate that I can leave to my heirs?

When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs. None of your other assets will be affected by HUD's reverse mortgage loan. This debt will never be passed along to the estate or heirs.

8. How much money can I get from my home?

The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.

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

I've been contacted by a firm that will give me the name of a lender for a "small percentage" of the loan? HUD does NOT recommend using an estate planning service, or any service that charges a fee just for referring a borrower to a lender! HUD provides this information without cost, and HUD-approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and free referral to a list of HUD-approved lenders. Call 1-800-569-4287, toll-free, for the name and location of a HUD-approved housing counseling agency near you.

10. How do I receive my payments?

You have five options: