Reverse mortgage is a mortgage loan where you receive money from your lenders, instead of paying them, while maintaining complete ownership of your home.

This allows you to tap into the equity of your homes and convert it to cash, which you can use for living expenses or any purpose you desire. This loan type has no income, medical, or credit requirements and doesn’t oblige you to make monthly mortgage payments.

You qualify for a reverse mortgage if:

• You are at least 62 years old (in cases where there are more than one person in the title, both must be at least 62 years old)

• The home serves as your primary residence

• You live in  a single-family home, condo, townhouse, manufactured home, and 1-4 unit homes where you are occupying at least one unit

• You have received counseling session from a source approved by the HUD

You can receive a lump sum, monthly payments, or a line of credit. You can also choose the terms for your reverse mortgages. In addition, you or your heirs don’t have a personal liability because the Federal Housing Administration insures both you and the lender against losses. The lender can only look to the property for repayment.

You are only required to repay the loan when the mortgage ends, you permanently move out or sell the house. The repayment is taken out of the home equity. Your heirs can also sell the property and use the money to pay for the loan.

Like many homeowners, you may be having a hard time keeping up with mortgage payments. One thing you can do to avoid possible foreclosure is to refinance your mortgage.

Mortgage refinancing essentially pays off your current mortgage and creates a new one. Luckily, you can refinance through the Federal Housing Administration (FHA). FHA can swap adjustable mortgages that are about to go to a higher rate to a fixed-rate mortgage.

This would give you lower FHA mortgage rates. It will also allow you to pay off your loan. With FHA refinancing you can also add extra payments on each month to lessen the amount you’d have to pay for the principal and interest.

The following are reasons why you should refinance to FHA loans:

• Current FHA rates are more attractive than those offered by conventional loans. You only need to pay 3 to 5 percent down payment with an FHA mortgage unlike traditional loans that can require as much as 20 percent.

• Qualification is easier because you don’t have to have a perfect credit history to qualify for a loan.

• FHA mortgage rates remain fixed for the whole life of your loan, which means monthly payments remain the same.

• If you have an adjustable-rate FHA loan, your current rate can only increase one to two percentage points in a year, and 5 to 6 percentage points over the life of the loan.

• Homeowners aged 62 and above can convert their home equity to monthly cash payments.

• Various FHA programs see to it that homeowners are protected from foreclosures.

There’s a government program that can help you with your mortgage, to prevent foreclosure.

The Hope for Homeowners (H4H) program, approved by Congress last July, will allow you to refinance to a more affordable 30-year fixed-rate mortgage through the Federal Housing Administration or FHA. The program, which runs from October 1, 2008 until September 30, 2011, is an alternative to expensive mortgages that will help you keep your homes.

You’re eligible for the program if you:

• are living in your current home, which is your primary residence

• have no ownership interest in another home

• cannot pay your mortgage without assistance

• have made at least 6 payments for your mortgage that should have originated on or before January 1, 2008

• have paid more than 31 percent of your monthly income as of March 2008

• can prove that you haven’t been convicted of fraud in the past decade, missed debt payments deliberately, and didn’t provide false information to get your current mortgage

Hope for Homeowners is a voluntary program, which means you and your lender must mutually agree to the terms of the program.

Other terms in the program are the following:

• loans awarded will be based on your ability to repay the loan

• borrowers have to share any equity and future value appreciation with the FHA

• lenders have to take in significant losses, which are less than the losses associated with foreclosure, to benefit from the profits of government-backed loans,

• maximum loan is $550,440

• new mortgage will not be more than 90 percent of the new appraised value

• borrowers can’t take on a second mortgage for the first five years from getting the new loan

More information on how to apply for the H4H program is available at the U.S. Department of Housing and Urban Development (HUD) website.

If you are having second thoughts about buying a house amid the current housing crisis, Federal Housing Administration (FHA) loans may just make you change your mind.

FHA-insured loans are becoming more attractive to homebuyers these days. Borrowers have set their sights on federal insured loans because getting conventional loans from private institutions have become more difficult due to tighter lending procedures. As a matter of fact, 530,000 FHA loans were given to people who bought and refinanced their houses this year. The preference to FHA loans has caused a 160 percent increase compared to the same period last year.

FHA loans are among the best choices for homebuyers. It doesn’t matter if you are buying a home for the first time or planning to refinance your mortgage. These loans require you to pay only a 3 percent down payment—way cheaper than what private insurers demand for conventional loans. With a 3 percent down payment, you can save a lot of money that you can use for other things. In addition, you can make extra payments on your monthly mortgage payments so that you can pay off the loan at a faster rate and save money on interest.

There will be some slight changes though. The housing bill, which was signed into law in the latter part of July, will raise the down payment requirement for FHA loans to 3.5 percent. Don’t be disappointed because this increase is meant to prevent foreclosures in the future. The bill will also get rid of seller-funded assistance, a practice where sellers provide homebuyers money to pay for down payment.

You can be assured that these developments concerning FHA loans would not get in the way of the program’s goal of helping more people have access to decent and affordable homes.