We play a significant role in serving America’s home ownership needs. In this process, we aspire to meet and exceed your expectations by delivering specialized services to help you find the right loan that meets your specific needs. We strongly believe, that this kind of service should be the standard for excellence in the mortgage industry.
You are ready to buy a home! After you receive your pre-approval, it’s very important to inform us of any changes to your financial picture or credit history as this could impact the amount or type of loan for which you’ll qualify once your loan is fully underwritten.
For most homeowners, the monthly mortgage payments include three separate parts:
Principal: Repayment on the amount borrowed
Interest: Payment to the lender for the amount borrowed
Taxes & Insurance: Monthly payments are normally made into a special escrow account for items like mortgage insurance, hazard insurance, and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company.
Obligations under the HECM for Purchase are the same as the traditional HECM reverse mortgage. You must continue payments for property taxes, homeowner’s insurance, any homeowner’s association fees, and the cost for basic maintenances of the home, in order to avoid defaulting on the loan.
There are some aspects of the HECM for Purchase that differ from the traditional HECM reverse mortgage. Because reverse mortgages are meant to help seniors age in place, you must move into the new home within 60 days after closing, and the new home must become your primary residence.
Mortgage insurance is generally required in one form or another when the down payment is less than 20%, and it protects the lender in the event of loan default. The lower the down payment, the higher the risk for the lender, and thus the higher the monthly mortgage insurance premium. Depending on your particular situation, there may be loan options available that either don’t require monthly mortgage insurance payments or allow your monthly mortgage insurance payments to be dropped at some point in the future.
(Disclaimer: *BPMI = Borrower Paid Mortgage Insurance; LPMI = Lender Paid Mortgage Insurance. LPMI may not be cancelled by the borrower; it terminates only when the loan is refinanced or paid off, and it usually results in a loan with a higher interest rate than BPMI unless discount points are added to lower the rate. BPMI may be cancelled or terminated when the loan reaches 80% of the original value of the property.)
With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest rate can change after a specified period of time. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us.