REVERSE MORTGAGES

Reverse mortgages enable Borrowers to utilize a portion of their home's equity in order to supplement their retirement income, or to purchase a home. Once approved and closed upon, Reverse Mortgage does not require any monthly principal and interest payments.

Once approved and closed upon, Reverse Mortgage does not require any monthly principal and interest payments. 
The only Reverse Mortgage that is insured by the US Federal Government is named a Home Equity Conversion Mortgage (HECM) and is only available through FHA approved lenders.
 

There are a number of factors to consider when reviewing the Reverse Mortgage as a possible solution for a Borrower’s cash flow needs. That’s why participation in HUD-approved housing counseling is required as a part of the approval process for an FHA HECM loan . Once Borrowers understand how reverse mortgages work, what to expect during the process, and what to look for a Reverse Mortgage provider, Borrowers will have the information necessary to make informed decisions.

  • Borrowers can continue to live in their homes and retain title to their homes as long as they continue to pay the property taxes, insurance, and maintenance.
  • The proceeds of the loan are usually tax-free and can be used to satisfy various needs for cash. 
  • No monthly mortgage payments are required to be paid during the course of the loan. Borrowers have to pay property taxes, insurance and maintenance.
  • A reverse mortgage is a non-recourse loan. Neither Borrowers nor their families/heirs are liable for any amount of the mortgage that exceeds the value of their home.
  • Borrowers can choose the disbursement option – either as full distribution, installments or in form of a Line of Credit.
  • Many lenders offer free reverse mortgage loan calculators that can help a Borrower get an estimate of a qualifying loan amount.
  • Costs of financing and fees associated with the Reverse loan are usually higher than the costs of other financial products. Borrowers are recommended to explore the best options available.
  • The loan balance of the Reverse Mortgage increases over time as well as the interest on the loan and the corresponding fees.

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