- Enables homeowners age 62 and older to convert their home equity into income without having to sell the home or give up title
- No required monthly mortgage payments to make while still in the home
- Loan proceeds are tax-free
- Reverse mortgages are commonly used to payoff existing mortgages, eliminating the monthly payment obligation
- Immediate disbursement of some or all loan proceeds
- Credit line available for future use
- Monthly payments for as long as the homeowner(s) occupy the property
- Monthly payments for a specified number of months
- Create a combination of loan disbursement payout options
Loan proceeds available to the borrower are based on two main factors:
- Age of homeowner(s)
- Value and location of home
Amount repaid is principal, acrued interest and any financed costs. The reverse mortgage pays you, regardless of your income. The amount you can borrow depends on your age, current interest rates, and the appraised value of your home or FHA mortgage limits for your area, whichever is less.
What are Common Uses for Reverse Mortgages?
- Hospital/Health Care Costs
- Repay Existing Mortgages
- Reduce Burden on Children
- Home Improvement/Repair
- Pay Property Taxes
- Daily Expenses
- Travel/Something Special
- Gifts
- Seniors who do not have enough income to make regular mortgage payments
- Seniors who do not wish to make mortgage payments, or would like to eliminate that monthly payment obligation
- Seniors who could benefit from a stream of income during their retirement years
- Seniors that are finding out that traditional retirement income sources (IRAs, pensions, 401(k)s, Social Security) aren't sufficient to cover everyday living expenses and healthcare needs
FOX News- The Scoop on Reverse Mortgages
What are the Typical Costs Involved?
Borrowers are responsible for closing costs. All closing costs can be funded directly through the loan. Closing costs are similar to those of any other mortgage loan.
Typical loan closing costs include:
- Appraisal
- Title search and insurance
- Recording fees and mortgage taxes
- Other typical and customary closing costs
- Keep property taxes current
- Keep Home Owners Insurance Current
- Maintain property in reasonable condition
- Reverse mortgages are non-recourse loans (borrower can never owe more than the appraised value of the home at the time of repayment)
- Advanced loan disclosures and loan illustrations are provided at time of application
- Counseling is required for all reverse mortgage applicants-provided by HUD, AARP and other reputable organizations
Before you make a decision, you should review the most frequently asked questions about reverse mortgages.