The loan amount is based on the value of the home, the age of the youngest borrower, and the interest rate offered

Mortgage Insurance is federally mandated and protects you and your heirs. It assure you will have access to your funds even if the balance of the loan exceeds the value of the house and protects against being liable for more than the value of the house.

No, you are will be responsible to pay these outside of the loan.

The heirs or estate can:

• Sell the property and use the proceeds to pay the loan balance and keep any remaining equity;

• Use personal funds or gifted money to repay the loan;

• Purchase the property for 95% of its appraised value;

• Provide the lender with clear and marketable title to the home through a “deed in lieu of foreclosure.” If the borrower’s heirs or estate do not want to take responsibility for selling the property, or purchasing it, the person authorized to act on behalf of the borrower’s estate can provide a “deed in lieu of foreclosure” to the loan servicer and avoid an actual foreclosure.

Borrowers must be at least 62 years old, named on the title of the home, and use the home as their principal residence. Spouses who do not meet these criteria cannot sign the HECM reverse mortgage loan documents as a borrower and will be identified as either an eligible non-borrowing spouse or an ineligible non-borrowing spouse depending on certain additional criteria.

If both spouses are borrowers, the HECM reverse mortgage features apply equally to both spouses even in cases where one spouse survives the other.

When the borrower passes away, an eligible non-borrowing spouse who follows the requirements may be able to defer repayment of the loan and continue living in the home, but they will not be able to receive any remaining loan proceeds and they must continue to meet the obligations of the loan.

An ineligible non-borrowing spouse would not be able to defer repayment of the reverse mortgage loan.

You can always get a variable rate with a HECM ARM, regardless of how you receive your payments from the loan-whether by way of initial draw at closing; a line of credit; or fixed monthly advances. However, if you select a fixed-rate HECM, you will only be able to take a single, lump-sum disbursement at closing.

With a HECM ARM, the rate either adjusts on a monthly basis or annually-it is your choice.

First, let's define two important terms regarding the restriction of movement with interest rates: "lifetime cap" and "periodic cap."

- A lifetime cap restricts the movement of an interest rate over the life of the loan.

- A periodic cap restricts the movement of the interest rate during a particular period of the loan (e.g .. from year to year).

Currently, monthly-adjusted HECM ARMs do not have regulated cap structures. Here at Fairway, we do not offer them with a periodic cap, but we do offer them with a lifetime cap of either 10 percent or 5 percent.

Annually-adjusted HECM ARMs do have regulated cap structures: the rate cannot move more than 2 percent, up or down, from year to year (periodic cap), and no more than 5 percent, up or down, from the starting rate over the life of the loan (lifetime cap).

Today, the actual interest rate on a HECM ARM is linked to the 1-year CMT (Constant Maturity Treasury) index. The expected interest rate, which is used to calculate the proceeds initially available to you from the loan, is linked to the 10-year CMT index.

The CMT is determined by the U.S. Treasury and the Federal Reserve (note: from 2008 to 2020, the LIBOR index was used).

With both annually-adjustable and monthly-adjustable HECM ARMs, the interest rate is the sum of the lender margin plus the appropriate index rate (currently the 1-year CMT). After the loan is established, the lender margins will never change, while the CMT portion of the calculation will adjust overtime based on the market conditions.

A reverse mortgage does not affect regular Social Security or Medicare benefits. However, if you are on Medicaid or receive Supplemental Security Income (SSI), reverse mortgage proceeds may affect your benefits.