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Reverse Mortgage

What is a Reverse Mortgage?

Imagine reversing the cashflow between you & your lender. Instead of paying your monthly mortgage - they pay you.

If you’re a homeowner over 62, this arrangement could be available for you.

If you’re a homeowner over 62, this arrangement could be available for you.
A reverse mortgage allows qualified people to access the equity in their home that they've built over the years. It eliminates your current monthly mortgage payment (if there is one) and you receive the remaining cash, tax-free, and can use it for anything. Payments are made to the homeowner either through a line of credit, lump sum, or monthly installments.
Homeowner requirements include:
  • The home is the primary residence,
  • Are at least 62 years old, and
  • Have sufficient equity in their home.
Best of all, there are currently no income or credit requirements.
There are many reasons why people get a reverse mortgage. You might need to pay down medical debt, make home repairs, help out your children or kick in for your grandchildren’s education. Insured by the Federal Housing Authority (FHA), reverse mortgages are also called Home Equity Conversion Mortgage (HECM or "Heck-um").
3 Kinds of Reverse Mortgages
  • This option is for you if you need a greater amount of money to pay for major obligations (i.e. current mortgage balance, property liens, significant repairs, or reverse mortgage loan closing costs). Your money comes in one lump sum at closing. The low fixed rate remains the same for the entire life of the loan.
  • A HECM Reverse Line of Credit grows over time!

    With this type of reverse mortgage there are several different ways to receive your money. Get lower closing costs by limiting your initial money disbursement for the first year, gain access to your credit line when you need it and more.

    The line of credit reverse mortgage is easily the most popular option for borrowers: about 66% of the time, according to AARP. It gives you a lot of flexibility with your finances. With the fixed rate option, you take all of your funds in a lump sum at the very beginning. However if you want to be able to access your funds as you go, the line of credit will likely work better for you.

    Other Benefits

    You don’t accrue interest on any of the funds that you’re not using. So, you don’t pay interest on the funds available to you as long as they remain un-borrowed. The HECM Line of Credit can never be frozen or closed while you still have a remaining balance left on it – not even during tough credit times. You’ve already paid your federal mortgage insurance to ensure that your line of credit is always available.

    You read that right. The unused portion of the credit line grows at the same rate at which the loan accrues interest, +1.250% monthly. This is a great benefit to many seniors looking for a stable future. For a better understanding of this complex element of the line of credit reverse mortgage, contact one of our reverse mortgage advisors.

  • Purchase a home using a reverse mortgage, without any monthly mortgage payments*. Find a home that meets your current needs or move closer to family.
    If you qualify, this Federal Housing Administration (FHA) insured home loan lets you use the equity from the sale of your previous home to buy your next one - all in one transaction.

    How much money you can receive from a HECM for Purchase loan depends on the age of the youngest titleholder, the current interest rates, the lesser of the appraised value, and the purchase price or the FHA lending limit.

    Why You May Love a Reverse Mortgage Purchase

    • Eliminate your monthly mortgage payments
    • Increase your purchasing power
    • Pay less upfront investment
    • Purchase a smaller, lower maintenance home that’s the right size for you now
    • Lower your retirement living costs
    • Enjoy carefree living in a senior housing community

    Effective Safeguards

    • Your Mortgage Insurance Premium ensures that the amount you owe on the loan never exceeds the value of the home at the time of sale
    • Independent HUD counseling is required prior to loan application
    • The lender can only look to the value of the home for repayment. No other assets (like your car) can be attached if the loan balance grows beyond the mortgaged home value

      * The borrower is responsible for paying property charges including homeowners insurance, taxes, and maintenance of the home for the term of the loan.
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