Reverse Mortgages
Retire Your Payment
By removing the burden of a monthly mortgage payment, you free up money for other areas of your life.
Accessing Your Equity
Proceeds from the equity in your home are “tax free.”
Remain In Your Home
By retiring your mortgage and using your equity, a Reverse Mortgage allows you to age in place and live in the home you love.
Is a Reverse Mortgage Good for Me?
1. The Planner
Monetize your home equity into monthly payments, much like an annuity, to supplement and maintain your income.
2. Remain in Your Home
3. Your Own Safety-Net
4. Buying a New Home
5. Ready to Retire
Eliminate your mortgage payment and enjoy the next phase of your life.
How a Reverse Mortgage Loan Works
Traditional Reverse Mortgages allow borrowers to access their home equity without having to make, like in a forward mortgage, principal and interest payments. Hence the term Reverse Mortgage because the lender makes the payment to the borrower. The Reverse Mortgage loan is repaid when the borrower or eligible non-borrowing spouse passes or leaves the home.
- The amount you can borrow is based on your age, property value and interest rate.
- Borrower is responsible to pay property taxes, insurance, and HOA fees while maintaining the property in good repair.
- Reverse Mortgages are non-recourse loans. The borrower will never owe more than the value of the property. If the loan balance exceeds the value of the property the Federal Housing Administration covers the difference.
How to Qualify
As a government insured loan, there are several requirements to qualify:
- Minimum age is 62
- The home must be your primary residence
- You must be the owner of the home
- Complete Counseling with HUD Approved Counselor
The lender will assess your ability to pay monthly taxes and insurance, living expenses calculated at 14 cents x the square footage of the property, and any debts found on your credit report. Examples are car payments, credit cards, etc.
Safeguards and Important Aspects of Your Reverse Mortgage
The HECM Reverse Mortgage product has greatly improved over the last two decades. Currently, important safeguards are in place to help seniors and heirs for years to come.
- Must complete Reverse Mortgage counseling by a HUD approved counselor
- A financial assessment is now an important piece of the underwriting and qualification process ensuring your home once the Reverse Mortgage is approved.
- For spouses under the age of 62, they can now qualify as an eligible non-borrowing spouse enabling them to remain in the home if the primary Reverse Mortgage borrower leaves the home or passes.
- Heirs have several options when the primary Reverse Mortgage borrower leaves the home or passes including.
- Heirs, if they qualify and are on title, can refinance for the exact loan amount of the Reverse Mortgage.
- Sell the home and receive any remaining equity after Reverse Mortgage balance and appropriate taxes and sales commissions are paid.
- If desiring to do so, a Deed-In-Lieu of can also be executed with the lender allowing all parties to walk away.
- Heirs, if they qualify, can purchase the home for 95% of the appraised value regardless of the Reverse Mortgage loan balance.
