Glossary of Terms - In the order to tell you the story of Reverse Mortgages.
RVM: Short For Reverse Mortgage which is used by Robert Fulton.
Reverse Mortgage: A home Loan with a reversal of payments back to the borrower.
Forward Mortgage: A home Loan with the collection of payment being sent each month to a mortgage company of bank.
HECM: An acronym for: Home Equity Conversion Mortgage".
HELOC: Another acronym, standing for Home Equity Line of Credit which is associated with a Forward Mortgage.
LOC: Line of Credit
Line of Credit on RVM: Special reserve fund growing at interest on your behalf awaiting for your demand, from your Reverse Mortgage.
Non-Recourse Feature: Associated with guarantee from FHA, the borrower nor their family will never owe more that home is worth at time of
P&I Payments: Principal and Interest Paymnets
FHA: Federal Housing Adminstration which is part of HUD, the entity that insures HECM's (Reverse Mortgages)
HUD: U.S. Department of Housing and Urban Development
PLF's Principal Limit Factors, determined by age, property value, rates and Zip Code.
MCA: Maximum Claim Amount
MAX Claim Amount: Basically the Appraised Value of Property up to the FHA HECM Lending Limit
HECM Lending Limit: On FHA Insured Loans this currently is $625,500.00
Principal Limit: How much the borrower can receive, how much you choose affects IMIP's. Higher when over 60%.
MIP: Mortgage Insurance Premium
IMIP: Initial or Upfront Mortgage Insurance Premium.
ARM: Adjustable Rate Mortgage
Fixed Rate HECM: Reverse Mortgage progam where the interest rate will not adjust.
Libor ARM HECM: Reverse Mortgage which adjusts interest rate monthly, using the Libor index.
LIBOR: Acronnym naming an index standing for: London, Inter-Bank, Offered, Rate; Published in the Monday WSJ
WSJ: Wall Street Journal
Set-Aside: Sets aside funds with the lender to finish or complete require repairs on the house that are not critical or safety issues.
LESA: Life Expectacy Set-Aside to fund future property taxes and homeowner's insurance premiums.
Partically-Funded LESA: This a only used with ARM HECM's
Mandatory Obligations: These are the items which can be paid off with HECM Proceeds in addtion limited Lump Sum cash at closing.
They may include the current mortgage, closing costs, and money to fund a LESA.
Property Charges: Property Taxes, home owners Insurance and things like that including HOA and PUD fees.
Hazard Insurance: Lending Industy's name for Homeowner's Insurance.
FA: Financial Assessment, which is review of borrower to determine if they qualify for a RVM (Reverse Mortgage).
This includes such buzz words like "Willingness and Capacity" and residual income.
Not Tax or Legal Advice. Always consult Lawyer and Tax Professions. Content of website are the sole opinions of Robert Fulton & does not necessarily reflect those of Fulton Financial Consultants, Inc.'s Investor/Lenders. If the borrower does not meet loan obligations such as taxes and insurance, then the reverse mortgage will have to be repaid." The Terms, benefits and features shared as accurately as possible on best efforts basis and subject to change without notice. "This material is not from HUD or FHA and has not been approved by HUD or any government agency." Please discuss any decision making specifics with Robert Fulton 360-222-3236.