Reverse mortgages are available in Anchorage, Alaska through private lenders, credit unions and the state Housing Financing Agency. The requirements for these mortgages are standard throughout the United States, and the loans provide one way for homeowners aged 62 and over to tap the equity in their homes without having to sell or move.
Reverse Mortgage Basics
A reverse mortgage is essentially a loan made against the equity you have in your home. The National Reverse Mortgage Lenders Association (NRMLA) advises that, to qualify for a reverse mortgage, you and any other owners must be at least 62 years old, living in the home you own and have enough equity in that home to cover the loan. You can initiate a reverse mortgage on a single-family house, a condo, a property containing two to four units, a townhouse or a manufactured home that was built after 1976. These rules apply to reverse mortgages in Alaska as well as every other U.S. state.
Types of Reverse Mortgage Payments
You can choose to take the proceeds from your reverse mortgage as a lump sum payment, monthly payments for a specified period or for life, a line of credit that you use whenever you wish, or a combination of all types of payments. According to the NRMLA, most people choose a line of credit. The line of credit allows for more flexibility than the other options, since you can withdraw the money when you need it.
Additional Costs
If you use a private lender for your reverse mortgage, you'll incur costs in addition to the interest that's charged on the loan proceeds. According to Reverse Mortgage Guides, the three major closing costs involved in a reverse mortgage are FHA mortgage insurance, the origination fee and title insurance. You'll need FHA insurance to guarantee that you or your heirs won't be forced to repay any excess balance if the payments you receive exceed the value of your home. You'll probably also pay for an appraisal and a survey, along with mandatory financial counseling.
HUD Reverse Mortgages
The Federal Housing Authority (FHA) offers a reverse mortgage called the Home Equity Conversion Mortgage, or HECM. Unlike private lenders, HUD requires that you have paid off your mortgage or have only a small balance remaining. The payment options are the same as those offered by private lenders, although HUD's loan limit is $625,000 as of 2010. On adjustable-rate loans, the FHA limits lenders to adjusting two percentage points per year or five total points over the life of the loan.
Anchorage Lenders
The Department of Housing and Urban Development (HUD) maintains a list of reverse-mortgage lenders by state. In Anchorage, as of May 2010, three banks, two credit unions and the Alaska Housing Finance Corporation, a state agency, provide these loans (see Resources).
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