With the aging of our population, and the anticipated financial needs of mature homeowners it is easy to see why a reverse mortgage is a retirement tool whose time has come. It is a popular home loan that was created specifically for senior homeowners, age 62 years and older, who want to convert part of their home’s equity into income.
We realize that your home is probably the largest asset you own and using its equity in a reverse mortgage requires serious thought. It may not be for everyone, however, a reverse mortgage is all about making the most of the equity that you have acquired. This popular home loan has been helping seniors for more than a decade and their desire to do so is usually supported and encouraged by the seniors’ adult children.
There are up-front costs associated with a reverse mortgage, so you may want to consider other options if you plan to stay in your home for only 2 to 3 more years. Since each senior’s situation is unique, it is important that you talk to someone you can trust when exploring your reverse mortgage options, the various types available or to simply get answers.
The proceeds you may be eligible to receive depends on several factors:
- Your age (or the age of the youngest borrower, in the case of co-borrowers)
- Your appraised home value
- Current interest rates
- Amount of equity in your home
As long as you have enough equity in your home you may qualify for a reverse mortgage. Basically, the older you are and the more equity in your home, the more money you can receive. Your home must be your primary residence.
Eligible property types include:
- Single family homes
- 1-4 unit properties
- Some manufactured homes
- Condominiums and townhouses
This is a non-recourse loan and a resource to generate financial support for the senior.
Additional protections include mandatory counseling and lifetime caps on adjusted interest rates.
Reverse mortgage proceeds can be used for virtually anything, it is completely up to you:
- Supplement your retirement income
- Help fund health care costs
- Pay for home repairs or modifications
- Pay off any existing debt, even an existing mortgage
- Cover property taxes
- Help prevent foreclosure
- Secure a cash reserve for emergencies
Seniors Use Reverse Mortgages to make a difference in their lives…
- Retain title to your home*
- Enrich the quality of your life with the extra money to supplement your retirement
- Capitalize on your home’s equity without having to move
- No monthly mortgage payments*
*Homeowners must remain in and maintain the home, and continue to pay insurance and property taxes.
You get to decide how to receive your money
- All at once, in a lump sum
- Fixed monthly payments either for set term or for as long as you live in the home
- Line of credit, which is the most common option, allows you to draw on proceeds any time
- Or a combination of the above