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Making the most of your retirement
Peace of Mind - own your home without making monthly mortgage payments, with extra money set aside for unexpected expenses or health care costs.
Freedom - easily pay your monthly bills, with enough extra cash to live comfortably and enjoy the occasional luxury.
Recreation & Leisure - enjoy time hosting friends and family, participating in social opportunities and pursuing your favorite hobbies.
Travel & Adventure - look forward to taking that long-awaited vacation or family cruise, sooner rather than later.
A Reverse Mortgage Can Help
A Reverse Mortgage is an innovative government-insured loan that enables you to tap some of your home’s existing equity to obtain cash to help fund your retirement needs.
Reverse Mortgage’s have helped thousands of homeowners just like you remain in their homes (mortgage payment free), throughout their retirement years.
Reverse Mortgage Resources
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What is a Reverse Mortgage?
A Reverse Mortgage is a loan that allows you to access some of the equity in your home to obtain cash now. The amount you receive is primarily based on:
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• current interest rates
• age of the youngest borrower
• appraised value of the home (up to certain limits)
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In general, the older you are, the more valuable your home, and the lower your loan balance, the more money you can expect to receive from a Reverse Mortgage.
You can get your money in a lump sum, fixed monthly payments, a line of credit that you can draw upon as needed, or a combination of these options. You can use the funds any way you want – to pay current bills, meet future financial obligations or simply enhance your lifestyle. Repayment is not due as long as you live in the home as your primary residence, continue to pay required property taxes and homeowners insurance, and maintain the home according to FHA requirements.
Is a Reverse Mortgage right for you?
To determine if a Reverse Mortgage is right for you, evaluate your finances and goals:
• current budget
• future finances
• lifestyle needs and desires
• personal goals
• how long you plan to live in your home
• how important it is to you to leave home equity to your heirs
The timing of your decision is important, since the amount of your loan will be based on the value of your home, your age and other factors. It is usually best to consult us. We are licensed Reverse Mortgage loan advisors and we can help you determine the best option for you.
Built-in safeguards protect you.
As with any other major financial decision, you should carefully consider all the facts and get expert advice before choosing a Reverse Mortgage. Fortunately, a Reverse Mortgage has built-in safeguards to help you determine if it’s right for you.
Independent HUD Counselors Provide Valuable Information
Before we can begin processing your Reverse Mortgage, you must talk with an independent counselor approved by the U.S. Department of Housing and Urban Development (HUD). They provide objective information about Reverse Mortgages, answer your questions and make sure you understand the process. This can often be conducted over the telephone for your convenience.
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Your Interest Rate is Capped
If your loan has an adjustable interest rate, there is a limit on how much the rate may change during a specified time period. These interest rate caps ensure your interest rate won’t increase beyond a certain level.
You Know All Your Costs Up Front
The Reverse Mortgage lender must disclose all estimated loan costs and fees, including the Total Annual Loan Cost (TALC), so you know exactly what you are paying to get the Reverse Mortgage.
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You Have Three Days to Cancel
The Reverse Mortgage contract has a “Right of Rescission,” giving you the right to cancel the loan within three business days of the closing.
The Reverse Mortgage Process
The steps to obtaining a Reverse Mortgage loan include:
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Examine Your Financial Situation
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Complete a Reverse Mortgage Application
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Speak with a HUD Counselor
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Home Appraisal
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Loan Processing and Underwriting
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Loan Closing
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Receive Your Money
Qualifying may be easy!
Chances are, you may already qualify for a Reverse Mortgage if you’re approaching retirement age and have sufficient equity in your home.
You are eligible for a Reverse Mortgage if you:
• are 62 years of age or older
• live in your home and have sufficient equity in it
• can pay off any existing liens on your home (you can use the money from the Reverse Mortgage to do this)
• can continue to pay your property taxes and homeowners insurance
Your home qualifies for a Reverse Mortgage if:
• it is your primary residence
• it is the right type of property; generally, single-family residences, two- to four-unit owner-occupied dwellings, townhouses, approved condominium units and some
manufactured homes are eligible for a Reverse Mortgage
• your home’s physical condition meets FHA requirements; if it needs repairs, the Reverse Mortgage can be used to pay for them
Repaying the Reverse Mortgage
Your Reverse Mortgage may provide much-needed cash to supplement your lifestyle. However, there will come a time when your situation changes and your loan will need to be repaid.
Examples of when a Reverse Mortgage must be repaid:
• You sell your house or transfer the title to another person
• You vacate your home for longer than 12 months (in most states)
• You pass away and there is no other borrower on the title
• You do not maintain the home’s condition according to FHA requirements
• You do not pay required property taxes and/or homeowners insurance
The most common situation is that the last borrower on the title passes away after living in the homeuntil his or her death. The estate then sells the home and repays the Reverse Mortgage with the proceeds, keeping any remaining equity. Remember, when you sell, neither you nor your heirs will ever be personally liable for repaying more than the market value of your home to repay the Reverse Mortgage.
If your heirs do decide to keep your home, they can do so by repaying the full loan balance.
Reverse Mortgage Q & A
Today, a Reverse Mortgage is becoming an increasingly popular way for seniors to supplement their retirement, offering a secure option for accessing cash based on the equity in their homes. Here are answers to common questions you may have about Reverse Mortgages:
What is a Reverse Mortgage?
A Reverse Mortgage is a loan that allows homeowners aged 62 and older to convert a portion of the equity in their home into tax-free cash. HECM Reverse Mortgage loans are insured by the Federal Housing Administration (FHA).
What is the difference between a Reverse Mortgage and a home equity loan?
With a traditional mortgage or home equity line of credit, you must meet minimum income and credit requirements to qualify for the loan, and you have to make monthly loan payments. With a Reverse Mortgage, there are no credit score and generally no income requirements, nor do you make loan payments.
Do I have to repay a Reverse Mortgage loan?
Yes, eventually. However, your payment is not due on your Reverse Mortgage loan as long as you live in your home, it’s your primary residence, you maintain it according to FHA requirements, and you pay required property taxes and insurance.
Do I still own my home with a Reverse Mortgage?
Yes. You keep the title to your home; the lender does not become a title holder. You own and can remain in your home as long as you meet all the Reverse Mortgage requirements.
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Is any home eligible for a Reverse Mortgage?
Generally, single-family residences, two-to four-unit owner-occupied dwellings, townhouses, approved condominium units and some manufactured homes are eligible for a Reverse Mortgage. The home must meet FHA minimum property standards. If home repairs are required, in some cases they can be
completed after closing using funds from the Reverse Mortgage.
Does a Reverse Mortgage affect my eligibility for Social Security or Medicare benefits?
A Reverse Mortgage usually does not affect eligibility for Medicare or Social Security benefits. Some government benefits, such as Medicaid and Supplemental Security Income (SSI), may be affected by a Reverse Mortgage. You should consult a qualified professional to determine if there would be any impact to your government benefits.
Are there income or credit score requirements necessary to qualify?
No. There are no credit score and generally very lenient income requirements.
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Do I have to make monthly mortgage payments?
No. Unlike a traditional home mortgage or equity loan, you do not make monthly loan payments. As with all mortgage loans, you must continue to pay your property taxes and homeowners insurance premiums.
How much money could I receive from a Reverse Mortgage?
In general, the older you are, the more valuable your home, and the lower your loan balance, the more money you can receive from a Reverse Mortgage.
What are the payment options for a Reverse Mortgage?
You can get money in a lump-sum payment, a monthly check, a line of credit or a combination of these options. You choose the option that best fits your needs.
Do I have to pay income taxes on the money I get from a Reverse Mortgage?
No. Because funds from Reverse Mortgages are considered loan proceeds and not income, the money you receive is not considered taxable income.
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Are there any restrictions on how I use the money I receive?
No. You can use the money from your Reverse Mortgage loan any way you like. Many people put the proceeds into a line of credit account for home repairs or improvements. Others use it to pay for in-home health care, medical costs or property taxes. You can even use it for a vacation, a new car or to help your grandchildren pay their college expenses. Use it however you want – it’s your money!
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How much do I have to pay to get a Reverse Mortgage?
You don’t have to pay anything up front for a Reverse Mortgage, except the cost of HUD required counseling. In some instances, the counseling fee may be waived. All other costs
– such as origination fees, third-party closing costs and FHA mortgage insurance premiums
– can be financed as part of the loan.
What happens to my home upon my death?
Upon your death, your heirs can keep your home by repaying the full loan balance.
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What if the loan is more than my home is worth?
When you sell your home, your repayment responsibility is limited to the value of your home, even if your loan balance exceeds that amount. However, if you or your heirs desire to keep your home, the full loan balance would need to be repaid.
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