Frequently Asked Questions
Who is 55places Mortgage?
55places Mortgage is a joint venture of 55places and Mutual of Omaha Mortgage.
Are monthly payments required on The 62+ Loan?
No monthly mortgage payments are ever required. The only financial responsibilities of the homeowner are property taxes, homeowners insurance, HOA dues, and general maintenance. However, if the borrower wishes to make payments on The 62+ Loan™, there is no penalty for doing so.
Will the lender own my home with The 62+ Loan mortgage?
No, the lender does not take control of the title. The borrower will retain ownership of the home and rights to the title. The lender's concern is limited to the outstanding balance of the loan.
When I pass away, will my heirs be responsible for the repayment of the 62+ Loan?
The 62+ Loan™ is a non-recourse loan, therefore the home is the only asset the lender can pursue to repay the loan balance. The heirs, or the estate, will only need to pay back the HECM loan if they choose to retain ownership of the home. They can do so by refinancing into their own name or purchasing the home for 95% of the value at the time the last borrower passes away. If they wish to sell the home, they can do that as well. Any remaining proceeds from the sale of the home, after paying the 62+ Loan™ balance, will go to the estate. If the heirs choose to refuse ownership, then the servicer will foreclose on behalf of the lender to seek restitution for the loan balance. However, this will not reflect negatively on any of the heirs' credit.
How can I receive proceeds from The 62+ Loan?
Proceeds from the 62+ Loan™ are tax-free and can be distributed in a variety of ways based on the borrower's choosing. Among these are monthly disbursements (set to be distributed for the lifetime of the borrower or for a specific amount of time), a single lump sum received at funding, a stand-by line of credit to be drawn upon when the borrower chooses, or a combination of monthly disbursements with a line of credit. For questions about your specific situation, please consult a tax specialist.
Will proceeds from The 62+ Loan affect my Social Security or Medicare benefits?
No, the loan proceeds from the 62+ Loan™ generally do not affect Social Security, Medicare, or pension benefits. However, they may have an impact on Medicaid, Supplemental Security Income (SSI), or other income-based programs, which vary from state to state. For details on your specific situation, please contact the benefits professional concerning that area.
How difficult is it to qualify for The 62+ Loan?
It is not difficult at all! You must occupy the home as your primary residence, be at least 62 years of age, and ensure you have enough income to pay your monthly obligations, including property taxes and insurance. The property must be eligible for financing, which includes single-family homes, two-to-four units, FHA-approved condominiums, townhomes, and planned unit development (PUD)
We may be looking to downsize. Is The 62+ Loan only used for refinances?
No, The 62+ Loan™ can be used to purchase a new home with a single down payment and no recurring monthly mortgage payments.
What if my home needs repairs? Am I disqualified from getting The 62+ Loan?
Using the equity in your home through the 62+ Loan™ is a great way to get cash needed for home repairs without increasing your monthly expenses. It is also possible to have cosmetic repairs completed after the loan funds dependent upon underwriters' review of required repairs.
If no monthly payment is due, then when do I pay back the loan?
The loan is due when a triggering event or maturity event occurs. These include:
- When the last surviving borrower dies and there is no spouse remaining in the home.
- When the home is sold.
- If the borrowers do not live in the home for 12 consecutive months or more.
- Failing to pay property taxes or insurance.
- When the home is no longer deemed habitable as defined by HUD.
We like to take long vacations & travel. Will that be a problem after The 62+ Loan?
Not at all! You may want to let servicing know of where to send your mortgage statements if you will be gone for long periods of time. But as long as you do not permanently leave the home or leave for longer than 12 consecutive months, the 62+ Loan will remain intact.
I am married to someone who is not 62. Can we still get The 62+ Loan?
Yes! Unfortunately the younger spouse will not be able to be on the title or be a co-borrower on the loan, but they will be protected under HUD guidelines to remain living in the home even after the older spouse passes away or is placed in a permanent healthcare facility.
What is the HECM for Purchase Loan?
The 62+ Loan™ is a HECM for Purchase loan, which is a specialized option for those 62 and over. Unlike traditional home mortgage loans, monthly payments are deferred and the loan balance increases over time. However, because the loan is insured by the FHA, neither the borrower nor the borrower's heirs have any personal liability for the repayment of the debt. A HECM for Purchase loan only requires a one-time down payment and borrowers' only ongoing responsibility is paying property taxes, homeowners insurance, and home maintenance.
Is The 62+ Loan a Reverse Mortgage?
The 62+ Loan™ differs from a reverse mortgage in that it is a loan issued by a mortgage lender but insured by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD). The FHA collects Mortgage Insurance Premium and an annual premium on the loan, which protects the borrower if the value of the home upon sale is not enough to cover the balance of the loan. The 62+ Loan™ is covered by rules and regulations, including third-party counseling, that protect the borrower.
A proprietary reverse mortgage, commonly known as a reverse mortgage, is offered by mortgage companies but not insured by the FHA. Therefore, it is not subject to the rules and regulations that a HECM for Purchase loan must adhere to. While companies that offer proprietary reverse mortgages often try to emulate the same protections offered by the FHA, they are not bound by them.