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Reverse Mortgages in Texas

Texas reverse mortgageReverse mortgages are relatively new to the state of Texas, with the first one being funded shortly after the turn of 2001. The reverse mortgage market in Texas is rather unique.

Starting loan values, every county in Texas carries a maximum loan limit of $200,000 for conventional reverse mortgages. This doesn’t mean that if a potential borrowers home is worth more than this limit that they can’t qualify for a reverse mortgage. It means that if the home is worth more than 200K, for example 300K, the FHA loan provisions will calculate the mortgage as if it were worth 200K.

However, seniors with high value homes still inquire about these loans. Therefore, the state of Texas offers proprietary reverse mortgages for those clients with higher home appraisals. The proprietary option accompanies the entire value of the home, which could quite possibly give the borrower more tax free cash in hand. In addition, elderly residents of Texas with reverse mortgages need not worry about foreclosure nearly as much, as these loans cannot be foreclosed without a court order.

The TX Reverse Mortgage Process:

The Texas reverse mortgage process mirrors that of most states, however it differs vastly in terms of the counseling stage of the loan. Federal provisions laid down by the HUD require that only the borrower obtains counsel from a TX approved HECM counselor. Texas law requires the spouse and all property owners to be advised through an approved counselor.

The reason that this requirement is installed in the loan process is because Texas state law considers all persons, whether they are titled or not, to be legal property owners by decree of the homestead interest. Further counseling implications in Texas consider whether or not the title was vested in a trust during counseling. If this is the case for the borrower, they must receive counseling for a second time after the title is conveyed.

When it comes to how much funding one receives, the amount you can receive is heavily dependent on the applicants age and value of the home in Texas. This will be calculated when you meet with a TX reverse mortagae lender.