Reverse Mortgages


What is a Reverse Mortgage?

A Reverse Mortgage is a special loan that permits borrowers to convert some of the equity in their home to cash. Instead of paying the lender a monthly mortgage payment, the lender pays you. This is a first mortgage lien against your property.

A Reverse Mortgage can give senior homeowners, age 62 and over, the funds they need to lead a more secure and enjoyable retirement.

Some examples include:

  • Make needed home repairs
  • Pay for long-term care
  • Supplement retirement income
  • Pay for a grandchild’s education
  • Cover Medical Expenses
  • Travel more frequently
  • Buy a new car

Understanding a Reverse Mortgage

With a reverse mortgage, you never have to make a monthly mortgage payment. As in the case with a traditional forward mortgage, you retain title to your home and remain responsible to pay the taxes and insurance. There are no income or credit requirements for a reverse mortgage.

The amount of money available to you depends upon a variety of factors including the appraised value of your home, your age, and the interest rate at the time of closing.

Options for getting your money

You may choose from different options to receive your money as follows:

  • Equal monthly payments as long as the home is your primary residence
  • A Lump Sum of all available funds paid to you at the closing.
  • The available funds can stay in a Line of Creditto use as needed. This line of credit will increase annually.
  • Any combination of the above

 

 

Don Nye
Certified Senior Advisor

How Repayment Works

Over time, the loan balance of a reverse mortgage will increase. It grows because of the money you receive and the interest added to the outstanding balance each month. No repayment is required as long as you live in the home as your primary residence. When the last surviving borrower dies, sells the home, or permanently moves, the full balance becomes due. When due, there is a limit on the amount obligated to be paid called a “non-recourse” limit. Quite simply, a “non-recourse” limit means that the total amount owed by the borrower can never exceed the value of the home. Federal Government Guarantee.

Gather the Facts – Choose Carefully

Although reverse mortgages are most often used as a financial tool to meet the immediate needs of seniors, a reverse mortgage is not always the best solution for every senior. Ask questions and if you are not sure of the answer, ask again.

Reverse mortgages clearly have a number of positive features for seniors. Most importantly, by using a reverse mortgage to liquidate a portion of your housing wealth, you do not have to move or relinquish control over your most important asset – your home.


For a free no obligation analysis or to simply ask questions, please call
Don Nye
Certified Senior Advisor
843-873-3310