What is a Reverse Mortgage?
Overview:
Reverse Mortgages are a smart financial tool allowing you, as a senior homeowner, to convert some of the equity in your home into tax free cash NOW. Best of all, you don’t have to repay the money you receive from your Reverse Mortgage while you live in your home, continue to maintain it and pay your property taxes and insurance.
Reverse Mortgages can truly be a life changing opportunity for you to live a more comfortable life in the home you know and love. Reverse mortgages have become very popular because they are a safe, secure and regulated financial solution for Seniors in today’s challenging economic times.
And only you (not the bank) remain on the deed to your home. That's right, you will continue to own your home and receive all the benefits of your Reverse Mortgage.
Here's an example:
John Smith is 76 and owns his home which is valued at $450,000. He owes $172,000 on his mortgage and $16,000 in credit card debt. His mortgage payment is $1,132 and the credit card payments are $642. He takes a Reverse Mortgage in the amount of $301,000, from which he pays off the mortgage and credit cards. This leaves him with a nest egg of $113,000 in additional funds and he no longer has mortgage payments or credit card payments.
We understand that a Reverse Mortgage may not be right for everyone. We encourage you to include your family members and financial advisors in your decision to proceed with a Reverse Mortgage and welcome the opportunity to educate anyone you desire. If you decide that a Reverse Mortgage is right for you, we're here to help!
Can I use my Reverse Mortgage funds for any purpose?
Yes, the money you receive from your Reverse Mortgage can be used for any purpose to enjoy life. Here are some common uses:
- Pay off your existing mortgage
- Pay off debt
- Manage everyday expenses
- Cover medical expenses
- Supplement your retirement income
- Have a cash cushion for unforeseen expenses
- Pay for in-home or long-term care
- Take a dream vacation or visit family more frequently
- Make needed home repairs or improvements
- Help you retire sooner!
- Provide money today, so you can delay taking Social Security until you're eligible to receive maximum benefits
- Help pay your grandchild's tuition
- Estate planning
Who can get one?
A homeowner aged 62 or better who occupies their home as their primary residence is eligible for a Reverse Mortgage. There are no minimum income or credit requirements.
How does a Reverse Mortgage work?
A Reverse Mortgage allows you to convert a portion of the equity you've built in your home into cash today without having to sell your home or make monthly payments. If you have a mortgage on your home presently, we'll pay it off at the closing.
How can I receive my cash?
The funds you're entitled to receive after we pay off any existing mortgage can be taken in several ways, depending on your need... the choice is yours:
- In one lump sum amount
- As a monthly payment for life
- As a line of credit from which you can draw whenever you like
- Any combination of the above options.
- You can change most of these options at any time
How much can I borrow?
The more your home is worth, the older you are, and the lower the interest rate is, the more you can borrow. The amount you can borrow is based on:
- Age - the age of the youngest borrower at the time of the loan
- Value - the appraised value of the home
- Interest Rate - the interest rate at the time your take out your Reverse Mortgage
- Equity - the more equity you have in your home, the more you can borrow
- Mortgage Program - there are a number of Reverse Mortgage programs and options to choose from and each influences the amount you can receive
How does the process work?
The process is simple and easy. It generally takes about four to six weeks. One of our friendly licensed Senior Security Reverse Mortgage Loan Originators will be dedicated to assisting you throughout the entire process. We understand your decision to move forward with your Reverse Mortgage is an important one and we strive to provide a relaxed, peaceful environment in which all your questions are answered in a courteous and professional manner. There will be no surprises because we will inform you beforehand of each and every step in the process. Click here to see the simple and easy step by step process.
What is the difference between a Reverse Mortgages versus a traditional mortgage?
A Reverse Mortgage is the opposite of a traditional mortgage:
- Traditional Mortgage: You borrow money and make monthly mortgage payments.
- Reverse Mortgage: You receive money based on the value of your home, the age of the youngest borrower, and the interest rate of your loan. You don't re-pay the loan while you live in, maintain your home, and pay property taxes and insurance. The loan must be repaid when you pass away, sell your home, or no longer live in the home as your primary residence.
What’s the catch?
There is no catch! The title to the home remains solely in your name. This is a regulated, government insured program specifically designed for you to draw on the equity in your home and you can spend the money any way you see fit.
Is there anything I have to do?
You continue to pay your property taxes and insurance while maintaining your home.
Will I ever owe more than my house is worth?
A Reverse Mortgage is a non-recourse loan. This means that neither you nor your estate will ever owe more than the loan balance or the value of the property (whichever is less). Also, no assets other than the home will ever be required to be used to repay the loan balance. Another benefit is that you (or your estate) are entitled to any profit if your home is worth more than what is owed on your Reverse Mortgage.
