Idaho Reverse Mortgage Guide
Idaho homeowners who are 62 years old or older have a powerful tool available that they can use to tap into their home equity.
As retirees in Idaho transition into their golden years, many are seeking ways to improve their financial situation — whether it’s boosting cash flow, funding home improvements, paying off credit card debts, supplementing retirement savings, or addressing any number needs
One option to consider is to access the equity they have built up in their homes through a reverse mortgage.
One option that may be suitable is accessing the accumulated equity in your home through a reverse mortgage. This federally backed loan allows eligible homeowners to borrow against their home’s equity without the burden of monthly mortgage payments.
In this comprehensive Idaho Reverse Mortgage Guide, we provide valuable information about reverse mortgages. We explore the different types available, the qualifications required, the rights of borrowers, and the application process.
What is a Reverse Mortgage?
A reverse mortgage offers older homeowners the opportunity to borrow against the equity in their homes.
The most common reverse mortgage is the home equity conversion mortgage (HECM), which is backed by the Federal Housing Administration (FHA) and regulated by the U.S. Department of Housing and Urban Development (HUD).
A reverse mortgage is a loan that provides borrowers with various options for receiving their funds, including a lump sum, monthly installments, a line of credit, or a combination of these methods.
One notable advantage of a reverse mortgage is that it eliminates the need for monthly mortgage payments, unlike a home equity loan, home equity line of credit (HELOC), or a traditional mortgage.
Instead, the reverse mortgage is repaid when the home is sold, no longer serves as the principal residence, the homeowners fail to meet certain requirements, or upon the homeowner’s passing.
Homeowners are still required to pay the property taxes, homeowner’s insurance, maintain the home, and pay any required fees such as HOA fees.
What Kinds of Reverse Mortgages Can You Get in Idaho?
Here are the four types of reverse mortgages that you can get in Idaho. The one you choose will depend on your unique needs and situation:
Home Equity Conversion Mortgage (HECM)
HECM reverse mortgages are exclusively available to borrowers who are 62 years of age and older. In this guide, we will focus on these types of reverse mortgages. There are no specific rules regarding how HECM reverse mortgages must be used. However, there is a lending limit set by the FHA. As of 2023, the current limit is $1,089,300.
Single-Purpose Reverse Mortgage
Single-purpose reverse mortgages, also referred to as property tax deferral programs and deferred payment loans, are the least common reverse mortgages. These specialized programs are exclusively accessible to homeowners aged 62 and above. Unlike other types of reverse mortgages, single-purpose reverse mortgages serve a singular purpose approved by the lender, often designated for home improvement projects.
Jumbo Reverse Mortgage
Jumbo reverse mortgages are specialized proprietary reverse mortgages that enable homeowners to borrow amounts exceeding the FHA lending limit of $1,089,300. These unique reverse mortgages are customized by individual lenders and are not supported by the FHA. While jumbo reverse mortgages generally carry higher interest rates, they do not require mortgage insurance premiums.
HECM for Purchase
A Home Equity Conversion Mortgage for Purchase (HECM for Purchase) is an innovative financial solution that enables homeowners to fund a portion of their new home through a reverse mortgage. This strategy involves coupling the reverse mortgage with a substantial down payment obtained from the sale of their previous property. As a result, older homeowners can comfortably upsize or downsize during their retirement years without the burden of monthly payments.
Idaho Reverse Mortgage Requirements
To qualify for a reverse mortgage loan in Idaho, the following requirements must be met:
- At least one homeowner must be at least 62 years old.
- The home must serve as the primary residence for the homeowners.
- Homeowners are required to have equity in their home.
- The home must be in good condition.
- Homeowners must be able to continue paying property taxes, homeowner’s insurance, HOA fees (if applicable), and maintain the home.
- The property must meet eligibility requirements for a reverse mortgage, including being a single-family home, a two-to-four-unit property with the homeowners occupying one of the units, an FHA-approved condominium, or an approved manufactured home.
- Prospective borrowers must complete a counseling session with a third-party counseling service approved by HUD.
Idaho Reverse Mortgage Borrower Regulations
While some states have established additional laws and regulations to govern how reverse mortgages work in their state, this is not the case for Idaho.
Idaho reverse mortgage borrowers are given the following protections as defined by the HUD and the FHA such as the following:
All reverse mortgage borrowers must complete a counseling session with a third-party HUD approved counselor to educate them on the workings of a reverse mortgage, to make sure that a reverse mortgage is right for their situation, to discuss alternatives, and make sure they aren’t being pressured by another person with a financial interest to pursue the loan.
Right to Rescission/Right to Cancel
Reverse mortgage applicants are able to cancel the loan application at any time including within three business days after signing closing loan documents.
A reverse mortgage is a non-recourse loan, this means that when it comes time to sell the home and pay back the loan, homeowners and/or their heirs will never owe more than the loan balance or the value of the home, whichever is less.
Idaho Reverse Mortgage Calculator
If you are considering a reverse mortgage loan, and you want to find out how much you might be able to qualify for, check out our Reverse Mortgage Calculator.
Please note the amount provided by this calculator is only an estimate. To find out more accurate numbers, we recommend talking to a reverse mortgage loan officer.
Idaho Reverse Mortgage Loan Application Process
The reverse mortgage application process is not a quick one. In fact, it can take up to 45 days to complete. If you’re seriously considering pursuing a reverse mortgage, that’s one reason why you may not want to delay getting the process started.
If you choose to apply for a reverse mortgage with Mutual of Omaha Mortgage, here’s what you can expect:
Step 1: Talk to Reverse Mortgage Loan Officer
Start by meeting with one of our reverse mortgage loan advisors. They will assess your situation, provide an estimate of potential benefits, and answer any questions you may have. Our loan specialists will guide you through the entire process.
Step 2: Counseling
After your financial review with your reverse mortgage advisor, you’ll need to undergo a counseling session with a HUD-approved third-party counselor. This session aims to educate you about reverse mortgage features, suitability, and other financial options. Once completed, you’ll receive a certificate that must be presented to the lender before officially filing the reverse mortgage application. This step ensures that you are making an informed decision.
Step 3: File the Application
Once you have the counseling certificate, your reverse mortgage loan officer will assist you in submitting your application and required documentation. This may include a photo ID, homeowner’s insurance policy, and property tax bill. Gathering this documentation at this stage will help speed up the loan closure process.
Step 4: Appraisal and Other Information Ordered
After submitting your application, Mutual of Omaha Mortgage will order a home appraisal to evaluate the condition and market value of your home. This appraisal helps determine the eligible loan amount. Additionally, a title and credit report will be ordered to check for liens and assess your financial health. This step typically takes one to two weeks to complete.
Step 5: Processing and Underwriting
Once the application and documentation are submitted, the manual underwriting process begins. The underwriter verifies that all reverse mortgage requirements are met and determines if the loan is approved. They may request additional documentation or home repairs before finalizing the loan. Your reverse mortgage loan advisor will keep you informed of any necessary actions.
Step 6: Closing
After approval of the application, a closing date will be scheduled. You have the option to sign the closing documents at home with the assistance of a mobile notary service or in person at the title company.
Step 7: Receive Funds
Following the signing of the closing documents, there is a mandatory three-business-day waiting period before the funds are disbursed based on the method(s) selected during the application process.
Find an Idaho Reverse Mortgage Loan Officer in Your Area
You can also find an Idaho Reverse Mortgage loan officer in your area through our loan officer directory or by clicking on one of the links below to find a loan officer near you:
- Boise Reverse Mortgage Lender Near Me
- Meridian Reverse Mortgage Lender Near Me
- Nampa Reverse Mortgage Lender Near Me
- Caldwell Reverse Mortgage Lender Near Me
- Idaho Falls Reverse Mortgage Lender Near Me
- Pocatello Reverse Mortgage Lender Near Me
- Coeur d’Alene Reverse Mortgage Lender Near Me
- Twin Falls Reverse Mortgage Lender Near Me
Reverse mortgage borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.
This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement.