Eligibility for a reverse mortgage in Texas typically requires the borrower to be at least 62 years of age and own a home with equity. The property must be a primary residence in good condition, and the owner must keep up with maintenance, home repairs, and property taxes. Contact District Lending today to determine if a reverse mortgage is right for you.

Many lenders have a lending limit on the amount of financing available with an HECM. However, borrowers exceeding this limit may qualify for proprietary reverse mortgages, similar to jumbo loans.

As with any loan, reverse mortgages require the payment of certain fees. Reverse mortgage interest rates vary depending on the loan amount and the lender. Closing fees may also be involved. Common fees include origination, mortgage insurance premium, title, and recording. 

Additionally, there is usually a fee for the counseling session with a HUD-approved counselor. Borrowers in Texas may also be required to complete a flood certification if the property is in a flood or hurricane zone.

HECM loans can impact your heir’s options with your Texas property. After the borrower dies, the listed heirs can take out a line of credit through a loan and keep it, sell it and pay off the HECM loan, or deed the title to the lender.

Texas allows reverse mortgage holders to repay the mortgage at any time without penalty or fees. Additionally, any equity in the home following the sale goes to the Texas homeowner or their heirs.

A HECM must be repaid if the borrower dies or moves out of the home for more than 12 consecutive months. If the borrower doesn’t sell the property, it reverts to the lender. The lender then sells the property, collects the loan balance, and then issues payment of any extra funds to the borrower or their heirs.

Exploring and preventing the risks of a HECM mortgage can help borrowers offset them and maximize the benefits. Sometimes, a HECM loan has higher fees than a traditional mortgage. Comparing various financing options and choosing the right type of reverse mortgage is crucial in controlling costs. District Lending offers customized loan consulting to ensure borrowers choose the best loan to meet their financial goals.

Borrowers may also worry about the possibility of foreclosure. To keep the loan in good standing, it’s important to keep the property in good condition, pay property taxes, and maintain an active homeowner’s insurance policy.

Finally, some HECM borrowers may worry about what happens to other family members in the home after their death or how it may affect the inheritances of heirs. If the homeowner passes, the surviving family member can sell the home outright and pay off the HECM mortgage balance. 

If family members want to continue living in the home, they can obtain financing and pay off the existing mortgage balance. Texas law also allows a non-borrowing spouse to continue living in the house for up to one year if the borrower moves. Borrowers or heirs also never lose the remaining equity, as they have a right to collect the difference between the current market value and leftover loan amount.