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What is a Reverse Mortgage?
It’s a special type of home loan that lets you convert part of your home’s equity into tax-free* cash without having to sell your home, give up the title, or take on a new monthly payment. The result for qualifying seniors is a life enhanced by choice, independence, and financial peace of mind.
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Am I Eligible?
You are eligible if you are at least 62 years old, have substantial equity in your home, and occupy your home as your primary residence. There are no income or credit qualifications.
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How Much Money Can I Get?
Lenders use a formula based on your age, interest rates, the value of your home, and the type of Reverse Mortgage you use to determine the amount you will receive. Generally, the older you are and the lower the interest rates, the more money you’ll receive.
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How Can I Take The Money?
You choose how you want to receive your cash: in monthly payments, as a line of credit, in a lump sum or any combination of these options. With most Reverse Mortgages, money left in a line of credit will not accrue interest and will continue to grow, making more money available to you in the future.
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What Are The Costs?
There will be closing costs just as with a conventional mortgage as well as a monthly service fee and for the HECM, FHA mortgage insurance. All of these costs can be financed into the loan.
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How Is The Loan Repaid?
You do not have to repay your loan until the last borrower permanently leaves the home. At that time, you will owe any money you have borrowed, the closing costs (if rolled into the loan), fees and the accrued interest. You or your heirs can pay the balance due and keep your home, or sell and use the proceeds for repayment. And there’s no prepayment penalty if you wish to repay your loan early.
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Why is Counseling Required?
The counseling session with an independent, HUD approved counselor will help you understand the Reverse Mortgage and your other options. It is a one-time session in person or by phone that will help you determine whether a Reverse Mortgage is right for you.
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Why Should I Take A Reverse Mortgage?
Borrowers have eased their cash flow, covered medical expenses, paid off credit card debt, financed home improvements, gifted children and grandchildren, purchased recreation homes and vehicles, and taken memorable vacations with the proceeds. You may use the money from a Reverse Mortgage any way you choose.
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