Is a Reverse Mortgage Loan right for you?

A reverse mortgage loan could be right if:

  • You expect to stay in your house for the majority of the rest of your life.
  • You wont need the equity for nursing home care or bequests
  • You and your spouse are both age 62 or older and can be borrowers on loan. As the house does not need to be sold until all borrowers die, the survivor will not be forced to move.
  • You will be able to pay taxes and insurance. If you get a HECM loan and don’t pay your taxes or insurance, you will be in default and could lose your home.

You choose how you would like to receive your funds from your reverse mortgage loan:

  1. A lump sum payout – Here you take the money all at once. Many are using this to clear off credit cards, bills and mortgages .
  2. Monthly Payments – Here you can top-up your retirement income by taking a payment each month. This can be for a set period of time or for as long as you live in your home.
  3. A line of credit – Here you will be given a set line of credit, which you can access when you want or need it. This gives a great deal of flexibility and you are only charged interest on the money when you take out. The line of credit cannot be reduced or revoked. The unused line of credit will grow and get larger over time giving you access to more usable money.
  4. A combination plan – Here you can have a combination of the above options. Our Reverse Mortgage Specialists will be able to talk you through the best combinations.

Reverse Mortgage Loans

A Federal Housing Administration (FHA) Home Equity Conversion Mortgage (HECM) or more commonly known as a Reverse Mortgage turns a homeowner’s equity into cash without the need to refinance the property or obtain a conventional home equity line of credit (HELOC).

A HELOC is a line of credit that uses the home as collateral and if used, requires monthly payments the homeowners must make.

Similar but different is a cash out refinance. In a cash out refinance, homeowners can refinance an existing mortgage and take out some extra cash and use it in whatever way they wish.

Overall, a reverse mortgage loan is a great option used to access your home equity without having to sell your home, and without any monthly mortgage payments.

A reverse mortgage loan lets you stay in your house and tap the equity in your home to pay for your needs in retirement.

You must be 62 years or older to get a federally insured Home Equity Conversion Mortgage (HECM) loan – There are private reverse mortgage loans that start at age 55. Please consult your loan officer for more information on this option.

The money you get is a loan, so it is tax free. It doesn’t affect costs pegged to your income, such as Medicare premiums or social security benefits. It also wont affect your eligibility for Medicaid or Supplemental Security Income, if you spend what you get within a month. Please consult your financial planner or tax specialist.

You only need to repay what you owe when you move, sell your house, or die, and you will never owe more than what your house is worth.