A reverse mortgage is a loan designed to allow seniors to draw upon a portion of the equity in their homes. Seniors can select to receive the loan proceeds either by a lump sum payment, by monthly installments, as a line of credit or as a combination of a line of credit and monthly installments thus providing cash flow even after retirement. The reason this type of mortgage is called a “reverse mortgage” is because the money goes directly to the home owner instead of into paying for the home.
Eventually the money paid to the homeowner is repaid with interest, however the loan generally does not become due until the borrower passes away, sells the home, no longer maintains the home as the primary residence or fails to pay property taxes, fails to pay homeowners insurance or otherwise fails to comply with the loan terms.
Getting a reverse mortgage is a big step and needs to be carefully evaluated. Many people have found that by taking a reverse mortgage they avail themselves of the equity they have built in their home.
Typically those who benefit most from a reverse mortgage are those who plan to stay in their homes over an extended period and have built a decent amount of equity in their homes. Also, due to the non-recourse feature of the reverse mortgage, you can never owe more than the value of your home.
Contact one of our professionals today to find out if you have enough home equity to make a reverse mortgage a good decision for you. If you have a good amount of equity in your home and you plan on staying there for an extended period of time then a reverse mortgage might be right for you.
If you own your home and are over 62 years of age or over, as borrowers can qualify at age 62. The home you are thinking of taking the reverse mortgage out on must be your primary residence. There are some conditions to what type of home may qualify. All eligible property types must meet all FHA property standards and flood requirements.
We can help you figure out if you’re eligible for a reverse mortgage. Call us today! If you're ready to get started on a reverse mortgage apply now!
These materials are not from HUD or FHA and were not approved by HUD or a government agency (HUD Mortgagee Letter 2014-10)