Homeowner Resources - Financial Regulation
Buying a home is an important decision and owning a home comes with a lot of responsibility. Should you finance the purchase of a home, your mortgage payment includes:
- Principal: the repayment of the borrowed amount
- Interest: payment to the lender for the borrowed amount (borrowing cost)
In addition, you’ll be responsible for the property taxes paid to the city/county and insurance to protect the property from loss against fire, smoke, theft or other hazards required by lenders. The taxes and insurance can be included in the mortgage payment (called “escrow”), should your lender require it in the mortgage documents. Depending on how much money you have available for a down payment, you may be required to pay Private Mortgage Insurance. My Home by Freddie Mac® has more information available on escrow and PMI. Depending on your neighborhood, you may also be responsible for homeowner association (HOA) fees, which are used to pay for the maintenance of the common areas in your community.
Your mortgage will either be a fixed rate (doesn’t change for the life of the loan), or an adjustable rate (“ARMs”) where the rate will be fixed for a few years and then adjust depending on an index.
If you would like more information on homeownership or financial counseling before you buy a home, there are resources available.
- Homebuyer education course providers in Maryland provide a number of courses including those required to qualify for the Maryland Mortgage Program:
- The U.S. Department of Housing and Urban Development (HUD)-approved Housing Counseling Agencies provide advice on home buying, renting, defaults, foreclosures, and issues with credit.
- The Consumer Financial Protection Bureau has a home loan toolkit to help answer questions before you buy a home as well as additional information about mortgages.
If you already own a home and are facing hardships that are endangering your ability to keep your home, there are resources available to you.
- The Consumer Financial Protection Bureau has information on avoiding foreclosure and terms to know if you get a letter from your servicer about foreclosure
- HUD also has resources for avoiding foreclosure, including information for FHA-insured mortgages.
- The Maryland HOPE program has foreclosure prevention resources, including a list of Maryland HOPE counselors.
- Renters in homes facing foreclosure can contact an assistance agency for more help.
- See also our pages for Homeowners Facing Foreclosure; and you can file a complaint against a mortgage lender, originator or servicer licensed by this office.
If you already own a home and are considering a reverse mortgage to supplement your income, keep in mind the following facts:
- A reverse mortgage is a loan that allows older homeowners to borrow against the equity in their home; in doing so the lender disburses payments to the homeowner. All reverse mortgages have interest rates, closing costs, and fees. The homeowner may still be responsible for payment of property taxes, insurance, and community association fees.
- Home Equity Conversion Mortgage (HECM) loans are reverse mortgage products originated by mortgage companies and insured by the Department of Housing and Urban Development (HUD) through its Federal Housing Administration (FHA) unit. HECM lenders must follow additional rules set by HUD.
- Like other mortgage products, a reverse mortgage must be repaid. A reverse mortgage becomes “due and payable” under the following circumstances:
- Upon the death of the last surviving borrower, the loan balance must be paid in full by the heirs. If an eligible non-borrowing spouse remains in the home, he or she must notify the lender immediately and demonstrate they have a legal interest in the home.
- If the home is no longer occupied by the borrower for a period greater than 12 months, the reverse mortgage becomes due in full.
- If property taxes are not paid, insurance is allowed to lapse, or the property is not maintained and falls into disrepair, the reverse mortgage becomes due in full.
- Before taking out a reverse mortgage, a prospective borrower is REQUIRED to meet with a housing counselor to learn more about the financial obligations and implications of available mortgage products. A HUD-approved housing counselor is specially trained and can offer independent advice separate from a mortgage broker or lender.
Call HUD at 1-800-569-7287 to locate a reverse mortgage counselor near you.
For more information about reverse mortgages, the following resources may be helpful:
- The Consumer Financial Protection Bureau (CFPB) has information about reverse mortgage loans on their website. The CFPB also published an easy-to-understand 4-page guide for those considering a reverse mortgage.
- HUD’s website has a main page for HECMs, where you can click on links for Frequently Asked Questions or an approved lender search, among others.
- If you are facing foreclosure on a reverse mortgage, call the Maryland HOPE hotline at 1-877-462-7555 for a referral to nonprofit foreclosure prevention housing counselor or attorney. You can also visit the HOPE housing counseling page for additional resources.
See our brochure on Reverse Mortgages: What You Need to Know as a Maryland Homeowner.