Reverse Mortgage Definition Glossary
Citizens Lending Group wants each California, Pennsylvania, and Florida homeowner who approaches us to understand everything about the process of obtaining a reverse mortgage. Our guide all about reverse mortgages is a great place to start. For those who need more in-depth info, we have created the reverse mortgage definition list you see below.
To learn more about reverse mortgage requirements or any reverse mortgage definition you see in this guide, contact us online or by phone today!
Reverse Mortgage Definitions: A Guide to Acronyms
Here are some common acronyms you may encounter in your reverse mortgage
application process as well as their reverse mortgage definition.
HUD: This stands for Housing and Urban Development and refers to the government agency created in 1947 that enforces fair housing laws, housing needs, and community development. This agency regulates the mortgage industry.
FHA: This stands for Federal Housing Administration. This reverse mortgage definition refers to the agency that ensures all mortgages.
PLL: This stands for Principal Loan Limit. In other words, this is the total amount of funds available to you at your mortgage closing.
MCA: This stands for Maximum Claim Amount. This is used to calculate the PLL above and is either the lesser of your home's appraised value or $625,000, which is the FHA limit.
Reverse Mortgage Definition List
Appraisal: A report that states the value of your home based on its current condition and the selling prices of homes in your area.
Counseling: Service provided by an independent third party (usually approved by HUD) to help you understand reverse mortgage eligibility and other options you may want to consider.
Initial Principal Limit: This is the amount of money you are eligible to receive from a reverse mortgage before funds are deducted for closing costs.
Line of Credit Growth Feature: Some loans allow for an increase in the availability of funds as time goes on. This reverse mortgage definition refers to that calculation.
Loan Closing Date: The date on which your reverse mortgage is finalized and the funds are made available to you.
Mortgage Insurance Premium: This fee is charged to borrowers as a small percentage of the Maximum Claim Amount. The MIP helps ensure that once the home is sold to pay back the reverse mortgage, the borrower will never owe more than the amount of the reverse mortgage.
Prepayment Penalty: This is a fee for paying off the loan before the loan is due (i.e. when the home is vacated or sold). Many reverse mortgages do not allow for a prepayment penalty for partial or total early payment.
Contact Us with Your Reverse Mortgage Definition Questions
Citizens Lending Group wants you to feel secure in your decision to seek a reverse mortgage. If any reverse mortgage definition above is confusing to you, or if you would simply like to learn more about reverse mortgage requirements, reach out to us today! We are always ready to help you make the best decisions for your financial future.