The Facts About Reverse Mortgages

Maybe you’ve heard of a reverse mortgage. Maybe you’ve even done some research on them. Or maybe you’re scratching your head wondering what on earth I’m talking about.

A reverse mortgage is a loan that is available to senior citizens age 62 or older who own their homes. It is similar to a home equity loan in that it allows the homeowner to borrow against the equity in his home. The difference is in the way it is repaid. A home equity loan requires the borrower to make monthly payments or risk losing his home. A reverse mortgage, on the other hand, requires no repayment until the borrower moves out permanently, sells the home, or dies.

The most commonly used reverse mortgage is the HECM, or Home Equity Conversion Mortgage. It is an FHA insured loan and was created by an act of Congress in 1989. It has grown in popularity over the last several years and is quickly becoming the product of choice for the informed senior.

There are several ways that you can receive the proceeds of a reverse mortgage. They can be distributed in a lump sum, in monthly payments, or as a line of credit. You can even combine the methods of distribution to suit your needs. This flexibility is a key advantage of reverse mortgages.

There are no income, asset, or credit score requirements to receive a reverse mortgage.  Nor are there any HEALTH questions. The only requirements are:

  • The borrower and any co-borrowers must be 62 years of age or older and must occupy the subject property as the primary residence.
  • If you have an existing mortgage on the home, it must be paid off at the time the reverse mortgage is done. Many clients find this alone improves cash flow and makes monthly budgeting much easier.
  • The home must be a 1-4 unit property and meet FHA property standards. It can be a single family, townhome, or a manufactured home that meets FHA guidelines. Even some condominiums may qualify.

It makes sense to consider a reverse mortgage if you are a senior citizen who needs money for any reason. Why not use the equity in your home to get the cash you need, all without adding the burden of another monthly payment.

Would you like a no – cost or obligation consultation. We would be happy to discuss the Reverse Mortgage program with you and assist you with determining if it is the appropriate solution for your personal situation. You can contact Sue Haviland at 443-677-0389 or e-mail shaviland@ireverse.com Or Brian Sacks at 443-324-8424 or e-mail bsacks@ireverse.com