Figuring Out the Fannie Mae Home Keeper Loans
In This Chapter
- Using your loan to purchase a new home ^ Seeing how you measure up to the requirements ^ Seeing how much you can get ^ Knowing the loan costs ^ Choosing a payment option f
- f you read about the Home Equity Conversion Mortgage (HECM) in Chapter 5 and are discouraged by the low lending limits, then the Fannie Mae Home Keeper loan may be for you. You will see a lot of similarities between the HECMs and Fannie Mae loans in this chapter, but there are significant differences as well. Fannie Mae offers many of the same features that the HECM provides, but because Fannie Mae is a private company, it can afford to have higher maximums and lower fees. (For those lucky few whose home value is substantially higher than the FHA or Fannie Mae lending limits, a jumbo loan may be your best bet. We show you in Chapter 7 how larger loans make reverse mortgages possible for higher-valued homes.)
There are two variations of the Fannie Mae loan: the Home Keeper and Home Keeper for Purchase. They work very much like the HECM (see Chapter 5), in that you will receive payments over the course of the loan, and you will not owe anything on the loan until you die or permanently move out of the home. The difference between the two Fannie Mae loans is just as you may have guessed: Home Keeper is for those who wish to stay in their current home, and Home Keeper for Purchase helps seniors who want to use their equity to buy new homes.
While Home Keeper loans are not secured by the federal government, they are backed by Fannie Mae — if your lender fails to pay you for whatever reason, Fannie Mae will step in to make sure your loan is doled out as usual.
In this chapter we show you all the ins and outs of the Fannie Mae reverse mortgage and show you how it differs from the other two major loan products.
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