RETIREMENT HELP
Reverse Mortgage
A reverse mortgage allows you to take the equity in your home and turn it into cash.
HOW IT WORKS
What Is a Reverse Mortgage?
Borrowers can access their home equity without having to pay principal and interest. Unlike a traditional loan where the borrower makes payments to the
lender, the lender makes payments to the borrower. The loan is repaid when the
last borrower or eligible non-borrowing spouse passes away or leaves the house.
The most common one of these loans is insured by the Federal Housing Administration. This is called a HECM.
- You are still the owner and retain the title.
- Age, property value, current mortgage balance, and interest rate will determine the amount you can borrow. The older you are, the more equity you'll have access to.
- You must continue to pay property taxes and homeowner's insurance.
- You must continue with basic home maintenance and repairs.
- As a non-recourse loan, the borrower will never owe more than the house is worth. If the loan balance exceeds the home's value, the Federal Housing Administration will cover the difference.
REVERSE MORTGAGE REQUIREMENTS
Who Qualifies
There are several important requirements borrowers must meet to qualify:
- You must be at least 62 years old.
- You must own your home.
- The home must be your primary residence.
- You must complete reverse mortgage counseling with an independent counseling agency.
- You must undergo a financial assessment to ensure you are able to meet the financial obligations of the loan, which includes the ability to pay your property taxes and homeowners insurance.
- If your spouse is younger than 62, they can qualify as an eligible nonborrowing spouse and remain in the home even if you leave or pass away, so long as they continue to meet all loan obligations.
STAYING PUT
Benefits of a Reverse Mortgage
Borrowers can remain in their homes as long as they meet the terms of their loan and help with funds that can supplement their personal retirement income.
No monthly mortgage
No monthly mortgage payment means you can access more cash for other expenses.
This can provide greater peace of mind, knowing you have your financials under control.
More available cash
The proceeds are tax-free and can be used in various ways, like paying health care costs or financing home renovations.
Your forever home
Stay in the home you love stay near family and friends.This can provide greater peace of mind, knowing you have your financials under control.
