Find the Best Reverse Mortgages in Baltimore, MD

What are the different types of reverse mortgages in Baltimore?

Some people use reverse mortgages to pay for home improvements or repairs. Others use them to pay off property taxes, medical bills, or an existing mortgage so they can move to a new home.

Homeowners have many options when choosing a reverse mortgage, and what you plan to do with the funds should influence the type of reverse mortgage you choose. Think about how you intend to spend the money, how much you need and how you want to receive the funds.

Types of reverse mortgages in Baltimore include:

• Home Equity Conversion Mortgages: HECMs are backed by the federal government, and their funds can be used for any purpose. However, because these loans are federally insured, the limit on a HECM is $726,525 at the time of publishing, and borrowers must receive financial counseling from an approved counselor. HECM loans require an upfront mortgage insurance premium, an origination fee, servicing fees and closing costs.
• Single-purpose reverse mortgage: Funds received from a single-purpose reverse mortgage can only be used for one reason, which is specified before you borrow. Common purposes include home repairs, home improvements and property taxes. Nonprofits and state and local governments often provide these reverse mortgages to people with low or moderate incomes, but they do require an origination fee, servicing fees and closing costs.
• Jumbo reverse mortgage: A jumbo reverse mortgage loan, also called a proprietary reverse mortgage, allows homeowners to borrow more than the HECM maximum if they have that much equity in their homes. These loans are backed by private lenders, so they don’t have the same government-mandated requirements. Fees include an origination fee, servicing fees and closing costs.

Reverse mortgage requirements and process in Baltimore

Reverse mortgages are designed for older people, so you must be at least 62 years old and:

• Own the property outright or have paid off a majority of your mortgage
• Live in the property as a primary residence
• Have no outstanding federal debt
• Be capable of paying property taxes, insurance and HOA fees

To confirm that you can pay the expenses listed above, lenders verify your income, assets, living expenses and credit history. Lenders also check your payment history for real estate taxes, hazard insurance and flood insurance. Finally, because HECM loans are backed by the federal government, HECM applicants must also meet with a HUD-approved financial counselor.

Reverse mortgages can only be used for properties that meet certain requirements. Qualifying properties include:

• Single-family homes
• Two- to four-unit homes with one unit occupied by the applicant
• HUD-approved condominium projects
• FHA-approved single-unit condominiums
• FHA-approved manufactured homes

All properties must meet FHA property standards and flood requirements, too.

There are several fund distribution schedules available for reverse mortgages:

• Lump-sum payment: With a lump-sum payment, you receive the entire loan amount at once. This type of payment is common with “HECMs for purchase” and single-purpose reverse mortgages.
• Monthly payments: Monthly payments come in fixed installments. However, you can opt for term payments, which last for a set term between five and 10 years, or tenure payments, which last as long as you keep the home as your primary residence.
• Line of credit: A line of credit lets you access funds as needed. Only the money you withdraw generates interest, so this is often preferable if you expect to need money on an erratic schedule.
• Combination: It is also possible to combine some of these options. For example, you could have access to a line of credit and monthly payments, but the monthly payments would be smaller than if they were your sole distribution option.

Some options are more flexible than others, but that flexibility means you need to be extra diligent with your spending. When weighing your options, consider factors such as how long you plan to stay in the home, how you plan to spend the money and your spending habits.

Baltimore reverse mortgage FAQ

How does a reverse mortgage work in Baltimore?

A reverse mortgage in Baltimore works by allowing homeowners to borrow against the equity they have built up in their homes. These loans do not require the borrowers to make any monthly payments. Instead, they are paid off when borrowers die or permanently move out of the home.

Can a reverse mortgage be refinanced in Baltimore?

Yes, you can refinance a reverse mortgage in Baltimore. If your home’s value has gone up or the interest rates have changed since you took out a reverse mortgage, contact a lender about refinancing.

Can heirs walk away from a reverse mortgage?

Your heirs are not responsible for your reverse mortgage, so they can walk away from it. However, your lender will then sell your home to repay the reverse mortgage. If your heirs would like to keep the home, they can choose to pay off the loan at no more than the appraised value.

How much money can I get with a reverse mortgage in Baltimore?

The amount of money you can get with a reverse mortgage in Baltimore depends on:

• Your age
• Your interest rate
• The value of your home
• The type of reverse mortgage you choose