The complexity surrounding reverse mortgages often leads to misunderstandings; borrowers can grasp the concept when lenders clearly explain the unique terminology and processes involved.
In reverse mortgages, Loan to Value (LTV) is replaced with Principal Limit Factor (PLF), determined by the borrower's age and anticipated interest rates based on HUD tables.
A financial assessment process reviews credit history, property charge history, and residual income, ensuring the loan provides a sustainable solution for the borrower's household.
All reverse mortgages are non-recourse, meaning borrowers are not personally liable for any amount beyond the home's value at loan maturity.
#reverse-mortgages #financial-assessment #loan-terminology #home-equity-conversion-mortgage #housing-policy
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