Senior homeowners can tap into accumulated home equity to release cash flow.
Many retirees aspire to have their mortgage paid off during their retirement years. Although, there is an alternative to use the hard-earned equity in a primary residence towards living expenses, paying off debt and more. Reverse mortgage benefits may be used for a primary residence purchase as well.
Reverse Mortgage Facts
Learn more to find out if a reverse mortgage is a great fit.
For Homeowners at Least 62 and Older
To qualify for a reverse mortgage purchase or refinance, the borrower must be at least 62 years old.
Increased Cash Flow
One area homeowners like about a reverse mortgage is the ability to take an income stream from mortgage to supplement other sources of income during retirement.
Counseling Is Mandatory For All Borrowers
Borrowers must complete the required counseling class in person. The counseling is also good for up to 6 months.
Option Of No Monthly Principal & Interest Payments
Reverse mortgages do not require a monthly payment, but interest does still accrue on the balance. Homeowners must pay property taxes, applicable insurances, and etc.
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Frequently Asked Questions
1. Is it true that I can use a reverse mortgage for buying a home and why would I consider that?
Actually, yes for qualifying buyers. Reverse mortgages are not a low down payment program. A purchase a significant down payment is required based on the borrower’s age and loan terms. Although, using a reverse mortgage could keep other assets in place including taking a retirement account distribution which could be taxable.
2. Is it true that if someone obtains a reverse mortgage and dies, the mortgage company takes the house?
No, families of the borrower have 6 months to sell or pay off the mortgage. There are possible further extensions available. It is not a bank’s goal to foreclose on the property.
3. Does the bank own the home when a reverse mortgage is borrowed against a home?
No. Just like other mortgages, the owner remains on the title at all times.
4. Can I end up owing more than my house is worth?
FHA mortgage insurance covers any deficiency. This is a non-recourse loan which means other assets are not at risk.
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