information on refinancing, including worksheets and a glossary of industry terms. • Visit bankrate.com and search for “How to Know When to Refinance Your Mortgage” to look at current interest rates available in your state and an online payment calculator. • The bankrate.com site also has a section called “7 Home Refinance Options for People with Bad Credit.” • For more information regarding types of mortgages and the settlement process, download the booklet Buying Your Home: Settlement Costs and Helpful Information at hud.gov. • Veterans with a VA mortgage can check VA.gov online for eligibility to refinance using Interest Rate Reduction Refinancing Loans (IRRRL).
REVERSE MORTGAGE
It may be possible to remain in your home by obtaining a reverse mortgage to pay off your existing mortgage debt and stop foreclosure. FHA’s Home Equity Conversion Mortgage (HECM) is a common reverse-mortgage option. A reverse mortgage pays you, either in a lump sum— usually subject to certain limits — in monthly installments, or a combination of both. The amount for which you qualify will depend on how much equity you have in your house. If that amount doesn’t cover the full amount you owe on your existing mortgage, you might be able to negotiate with the existing lender for a reduced lump sum payment. Reverse mortgages offer some appealing advantages. If you have sufficient equity in your home and are approved for a reverse mortgage, you will no longer have to make mortgage payments, and you might receive enough money to pay other debts. The new lender is getting your house, so you probably won’t be 43
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