Making Your Golden Years
Many of today’s seniors were badly affected by the financial crisis of 2008 and following recession, which hit during what should have been their best earning years. Social Security helps, of course, but it pays only $1,234 a month to the average American retiree. Without a decent income, your retirement won’t offer the cultural and recreational activities you’d been looking forward to, and you may even find yourself skipping visits to the doctor or to your family and friends. Fortunately, if you have equity in your home, you may be able to improve your day-to-day financial situation with a reverse mortgage.
A Reverse Mortgage
A reverse mortgage functions like a home equity loan or line of credit in that you use some of your home equity to borrow cash. With a reverse mortgage, though, you won’t have to make no principal and interest payments while you continue to live in your house. Reverse mortgages were created specifically for senior homeowners, 62 years and older, who want to convert part of their home’s equity into loan proceeds. Consumers will remain responsible for paying taxes, insurance and maintenance.
Reverse Mortgages can be used for:
- Pay off existing mortgage with loan proceeds
- Cover healthcare costs
- Pay taxes and insurance
- Make home renovations or simply build a monetary reserve
Reverse mortgages are non-recourse loans which means that there is no recourse to you, your estate or your heirs if the loan balance exceeds the home’s value at maturity. Just as long as you or your estate sell the property to pay off the debt. If you or your estate want to retain the property, the balance must be paid in full. Any equity remaining in the property after the reverse mortgage is paid belongs to you or your estate.
Highlights of a Reverse Mortgage
- No monthly mortgage payments
- Live in the home as your primary residence, pay taxes and insurance, and comply with the loan terms.
- Insured by the Federal Housing Administration (FHA)
- Maintain self reliance
Available Flexible Payout options
Counseling by an independent, third party, FHA approved counselor is required to ensure consumer’s knowledge of program.
- Line of credit
- Lump Sum
- Fixed monthly payment for a set term
- Combination of the above mentioned
Eligible Property Types include:
- Single family homes
- 2-4 unit properties
- FHA approved condominiums and townhomes and some manufactured homes
Reverse Fixed Rate Jumbo loan for higher-valued homes appraised from min. $500,000 to max $6 million. This is not an FHA insured product.