Finance
Which federal program provides mortgage insurance for Colorado senior homeowners through an FHA-insured reverse mortgage?
AVA Home Loan Guaranty Program
BHome Equity Conversion Mortgage (HECM) Program✓ Correct
CUSDA Section 502 Direct Loan Program
DFreddie Mac Home Possible Program
Explanation
The Home Equity Conversion Mortgage (HECM) program is the FHA-insured reverse mortgage program for homeowners 62 and older. It allows senior homeowners to convert home equity to cash with no monthly payment requirement, insured by the Federal Housing Administration.
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Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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