Foreclosure Strategies
May 10 2018
The best way to deal with a foreclosure is to take aggressive legal action when the foreclosure laws... [Read More...]
November 3, 2023 By
In a regular mortgage the borrower receives a loan and immediately starts making scheduled monthly payments. In a usual reverse mortgage on a home, the borrower, ages 62 or older, resides in the home and if it is their primary residence, they can and apply for a reverse mortgage.
The borrower receives loan proceeds, but the repayment on the loan is deferred until the borrower’s death, sale of the of the property or when the borrower permanently relocates out of the property, or defaults on other terms of the loan. The reverse mortgage loan is secured by the home occupied by the borrower as their primary residence.
A reverse mortgage for Co-op is called a reverse cooperative apartment loan. In this case, the borrower age 62 or older can apply for the reverse mortgage. The apartment must be the primary residence of the borrower. Every year on the anniversary date of the loan the borrower must recertify that he or she is still living in
this apartment. In any situation where the homeowner is out of the apartment for a period of 12 months or more due to physical ailment or illness, it no longer qualifies as his or her primary residence.
There are several ways the borrower on a reverse mortgage can receive the proceeds of the reverse mortgage. He or she can receive it in equal monthly payments. They can receive it in a fixed number of payments. They can have a line of credit option where they can remove the proceeds up to the amount of the loan.
In Co-op reverse mortgage cases, the Co-op board of Directors must approve the reverse cooperative apartment unit loan. It is unknown how boards of directors of co-ops will respond to applications to allow homeowners withdraw the equity from their homes.