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What is a Reverse Mortgage?
Geared towards homeowners ages sixty-two and older; reverse mortgages allow owners to pull out equity to pay off their mortgage sooner.
How to Proceed?
When you take out a reverse mortgage, you can choose to receive the proceeds in one of six ways:
The lender gives the owner/borrower equal payments monthly for a set period of time.
The only option that comes with a fixed interest rate. One large chunk when the deal closes.
Borrowers can get money as needed and only pay interest on the amount taken out.
Similar to term payments. As long as at least one borrower lives in the home, the lender gives them steady monthly payments.
The same as above but with a line of credit available should the need arise.
The lender gives the borrower equal monthly payments for a set period of time. If more money is needed, a line of credit is available to access.
Learn & Plan
What Are Some Benefits?
If an elderly homeowner’s net worth is tied-up in their home – paying down their mortgage may offer them more flexibility in their later years.
Want to Know More About Reverse Mortgages?
Reverse mortgages are a certain type of FHA loan which means they’re backed federally, giving homeowners more security. The way it works is that when an owner moves or passes – the reverse mortgage funds goes to the lender and whatever is left over goes either to the still-living owner or to their beneficiaries.
Do I Qualify?
To qualify, owners need about 50% equity in their home to typically secure an HECM (Home Equity Conversion Mortgage) which is the most common type of reverse mortgage. HECM is offered for homes priced $765,600 and below — homes valued above that require a jumbo reverse mortgage or a proprietary reverse mortgage.
