A Reverse Mortgage is a special type of mortgage that enables you, as an older homeowner, to tap the equity you have in your home while giving you the maximum amount of flexibility to address your particular financial needs, whether it is a lump sum to pay an unexpected hospital bill or a stream of regular payments to supplement your monthly income. Unlike traditional home equity loans, no re-payments on the Home Equity Conversion Mortgage (HECM) are required for as long as you live in your home.
With a reverse mortgage, you receive a portion of your home’s equity according to the payment or income plan that you select. You are permitted to change the way the money is paid to you at any time after origination, and you may change this as many times as you wish.
This is a Safe Government Program.
The safety was assured in 1989 when the United States Congress authorized the Federal Housing Administration’s (FHA) Home Equity Conversion Mortgage (HECM), and since then the popularity of this government program has grown immensely. No deficiency judgment may result from your reverse mortgage. FHA insurance guarantees against any loss to the lender.
HECM Reverse Mortgages have a number of federal safeguards built into them to ensure seniors are protected. The interest rate and all of the fees are government regulated. The Reverse Mortgage Education Project was created as a safeguard, where seniors are required to obtain Free education from a HUD Approved Housing Counselor in order to participate in the program. These safeguards were put in place to help protect and educate you.
There are Very Few Requirements in Obtaining a Reverse Mortgage:
- Both spouses must be at least 62 years of age or older
- The home must be your primary residence
- The home either needs to be paid in full, or have a mortgage balance that can be paid off with the proceeds of the Reverse Mortgage
- Unlike traditional mortgages, the approval process has nothing to do with your income or credit rating
There are Many Program Benefits:
- There is no repayment on the mortgage as long as you live in your home
- The proceeds can be used for any reason that you see fit
- You retain ownership to your home, not the Lender
- The proceeds from a Reverse Mortgage are not taxable
- The FHA Reverse Mortgage is a Federally insured program
- After your estate repays the lender, the remaining equity is paid to your heirs
- There are a number of flexible payment options available to you
The Amount That You Can Receive Depends on 3 Factors:
The Loan is Repaid When:
- Proceeds from the sale of the home: The remaining equity will be distributed to your heirs or your estate
- Refinance the Home: If your family or estate wish to keep the home, a conventional mortgage can be used for repayment and any additional equity remains in the control of your family members or the estate
- Life Insurance Proceeds
For more information, please contact Bill Roe (386) 428-0975.