The money received through a HECM can help supplement other sources of retirement income.

Steady cash flow may allow you to complete those home improvements you have considered without using another credit line.

Seniors can also use the funds from a reverse mortgage to pay medical expenses or insurance deductibles.

Stop making payments to the lender and use your newly sourced income to travel the world or spend more time with family.

Enter your retirement years debt-free by using the money to pay down credit card balances.

Oregon borrowers must meet the following requirements to qualify for a reverse mortgage loan:

• Minimum Age: Oregon law requires reverse mortgage borrowers to be at least 62 years old. Family members can live on the property as long as the borrower meets the age requirements.
• Residency Status: An Oregon reverse mortgage is only available for principal residence properties. It cannot be used for investment or vacation properties.
• Property Type: Only single-family, condo, townhome, or manufactured homes qualify for HECM loans.
• Home Maintenance: Oregon reverse mortgage borrowers must continue maintaining their homes to qualify for the program.
• Fee Payments: Homeowners must also keep up with all home fees, including property taxes, homeowners insurance, HOA fees, and mortgage insurance premiums.
• HUD Counseling: The Federal Housing Administration (FHA) and the U.S. Department of Housing and Urban Development (HUD) require borrowers to complete a financial counseling session before receiving loan proceeds. Borrowers must have proof of completion, which is a HUD-issued counseling certificate.

Anticipating the associated fees of a reverse mortgage can help speed up the process. Reverse mortgages require the borrower to pay closing costs, such as origination fees, title fees, and mortgage insurance.

Additionally, HECM loans require the completion of an appraisal, which determines the home’s value and how much equity is available. The bank or lender usually schedules the appraisal, but the borrower is financially responsible for the cost.

Mortgage borrowers will also pay interest on the loan. Interest on HECM loans varies, depending on the lender and the amount you borrow. Be sure to work with a trustworthy lender to access affordable rates. District Lending promotes competitive rates.

Protect your estate and heirs by understanding how a reverse mortgage may affect them. Oregon law allows heirs to inherit a house with a reverse mortgage.

However, heirs must settle the loan balance if the borrower moves or dies. Heirs may choose to continue living in the house, requiring them to qualify for a new loan to pay off the loan balance.

Your heirs can sell the property and use the proceeds to settle the lender balance. Heirs also have the option to return the property to the lender, who will usually sell it to recoup the loan balance. In either case, heirs will receive any additional funds after paying what is owed on the loan.

Reverse mortgages are non-recourse, which means you’ll never owe more than the loan balance. The remaining equity reverts back to the borrower or their heirs. Additionally, heirs are never expected to repay the reverse mortgage proceeds you receive during ownership.

A property with a reverse mortgage belongs to the homeowner for as long as they occupy it. However, as soon as the borrower sells, moves, or dies, the reverse mortgage loan becomes payable. The specific timeline for repayment varies, depending on the lender.

The homeowner should be aware of any potential risks when considering a HECM.

Some seniors may avoid a reverse mortgage because of the high fees. District Lending helps borrowers control costs and minimize fees through competitive interest rates. Our team works with multiple lenders to ensure a transparent, convenient, and affordable experience.

Senior homeowners may also worry about the risk of foreclosure with a reverse mortgage. Reverse mortgage loans become forecloseable if the homeowner doesn’t keep up with routine repairs or fees. Maintaining the property’s condition and making payments promptly helps avoid the risk of foreclosure.

The funds seniors receive through reverse mortgage loans can also impact government benefits like Medicaid. This is why exploring financial counseling is so important before choosing a reverse mortgage. Be sure to compare the income you’re eligible to receive through a loan with any other funds you may qualify for to choose the right strategy.

Also, to help minimize these risks, Oregon borrowers must complete a HUD-approved counseling session. Through HUD counseling and discussing your financial goals with a District Lending loan officer, you can ensure you make the right decision. Contact us today for a free lending consultation.