Is a Reverse Mortgage right for you?

A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity accumulated over years of home mortgage payments are now made payable to you with several disbursement options to choose from. Unlike a traditional home equity loan or second mortgage, you never need to repay the reverse mortgage as long as you live in the home. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements, and more. Since your home is probably your largest single investment, it's smart to know more about reverse mortgages, and decide if one is right for you!

I've heard that there are just as many negatives as there are pluses, what's the catch?
There is no catch. What you'd probably really like to know is what's in it for the lender, how you go about repaying the loan, whether you're putting yourself at risk of losing your home, and if you'll pass any liabilities onto your relatives.
You make no payments as long as one homeowner remains living in the home. This also means that even if you outlive the terms of the loan the home will remain your place of residence and you will continue to make no payments (however, interest will continue to accrue). Upon vacating the home, your estate has up to 12 months to repay the initial loan along with the interest accrued (usually by selling). If you only mortgaged a portion of your equity or if the home sells for more than the outstanding balance, the remaining equity passes to your relatives. They are never held personally liable for the reverse mortgage because it is secured solely by the equity in your home. When your heirs inherit the home they have the option of selling it or refinancing with a traditional mortgage for the purpose of keeping the property. Additionally, the FHA mortgage insurance ensures that you can never owe more than the sale-price of your home, even if the home depreciates.

Eligibility requirements call for the borrower to be 62 years of age or older. There are no income or credit requirements. Your home must be a single family dwelling or a two-to-four unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-approved.

All things considered, reverse mortgages give you the opportunity to enjoy financial independence in your retirement:
o The payments you receive are tax free
o All costs are packaged into the reverse mortgage so you never have out of pocket expenses
o You'll have more cash on hand to enjoy your retirement
o Your Social Security and Medicare benefits will not be affected
o Interest rates are usually significantly lower than home equity loans and second mortgages
o You choose which method of receiving payment is suitable for you
o You keep the title to your home
o You can never be foreclosed on by the bank or forced out of your home

If you'd like to find out more about gaining the financial freedom you deserve we welcome you to fill out the form below.