REVERSE MORTGAGE LOAN
How Do We Qualify For Extra Money by using a
Reverse Mortgage Loan
Homeowners over 62 can use the Cash Proceeds
from a reverse mortgage for:
Paying off or Consolidating Debt
Everyday Expenses and Emergencies
Replacing Job Income While in Retirement
Providing Family Members Financial Help
Funding Home Improvements
Purchasing a Second Home or Investment Property
Offsetting Medical and Prescription Drug Costs
How much you can you receive? Submit the form below to find out?
Understanding Reverse Mortgages: A Guide for Homeowners
A reverse mortgage can be a valuable financial tool for homeowners aged 62 or older who are
looking to supplement their retirement income. It allows you to convert the equity in your home
into cash without having to sell your home or take on a monthly mortgage payment. But how
does a reverse mortgage work, and is it the right option for you? Let’s break it down.
What is a Reverse Mortgage?
A reverse mortgage is a loan that allows homeowners to borrow money against the value of
their home. Unlike a traditional mortgage, you don’t make monthly payments to the lender.
Instead, the loan balance increases over time and is repaid when you sell the home, move out,
or pass away.
The most common type of reverse mortgage is the Home Equity Conversion Mortgage
(HECM), which is backed by the U.S. Federal Government. There are also proprietary reverse
mortgages, which are offered by private lenders and may have different features or
requirements.
How Does a Reverse Mortgage Work?
•
Eligibility: To qualify for a reverse mortgage, you generally must be 62 or older, own your
home outright or have a low mortgage balance, and live in the home as your primary
residence.
•
Loan Amount: The amount you can borrow depends on several factors, including your age,
the value of your home, the interest rates, and the lending limit in your area. Older
homeowners generally qualify for higher loan amounts.
•
Payment Options: You can choose how you want to receive the loan proceeds, such as:
1.
Lump sum
2.
Monthly payments (for a specific period or as long as you live in the home)
3.
Line of credit
4.
A combination of the above
•
Repayment: Unlike traditional mortgages, reverse mortgages don’t require monthly
payments. Instead, the loan is repaid when the borrower sells the home, moves out, or passes
away. If there’s any equity left after the loan is repaid, it goes to the homeowner or their heirs.
Benefits of Reverse Mortgages
1.
Supplement Retirement Income: A reverse mortgage can provide additional cash flow to
cover expenses like healthcare, home maintenance, or daily living costs without having to sell
your home.
2.
No Monthly Payments: You don’t have to worry about making monthly payments, as the
loan is repaid when you sell or move out of the home.
3.
Stay in Your Home: With a reverse mortgage, you can continue living in your home for as
long as you meet the loan requirements (such as paying property taxes and maintaining the
home).
4.
Tax-Free Income: The money you receive from a reverse mortgage is generally not
taxable, as it is considered a loan advance.
Considerations and Potential Risks
While a reverse mortgage can offer financial relief, there are some important factors to keep in
mind:
•
Accumulating Loan Balance: Over time, the amount you owe increases due to interest and
fees. This could mean your heirs might not inherit as much, or in some cases, the sale of the
home may not cover the full loan balance.
•
Impact on Benefits: Reverse mortgage payments could affect your eligibility for government
programs like Medicaid or Supplemental Security Income (SSI), so it’s important to consult with
a financial advisor.
•
Homeownership Responsibilities: You still have to maintain the home, pay property taxes,
and cover homeowner’s insurance. Failing to do so could result in the loan being called due.
Final Thoughts
If you’re looking for ways to leverage the equity in your home and secure financial freedom
during retirement, a reverse mortgage may be a viable solution.
Need Quote and more Information?
Click Here to request a quote and one of our experienced loan officers will contact to guide
you through the process and help you make the best choice for your future.