What is a reverse mortgage?
If you’re looking for ways to supplement your retirement income or access your home equity with a Reverse Mortgage, Federal Housing Administration (FHA) insured reverse mortgage loan may be the answer. A reverse mortgage loan allows you to access a portion of your home’s equity to obtain tax-free funds without having to make monthly mortgage payments.
How will this work for me?
If you’re 62 years of age or older and have sufficient home equity, you may be able to get the funds you need to:
What do I need to do for this to work for me?
Applying for a reverse mortgage loan is simple. To be eligible for a reverse mortgage loan, some
key requirements are:
In addition to the eligibility requirements, you must also meet the following conditions to obtain
a reverse mortgage loan:
How does this process work?
How a HECM Loan Works
We offer FHA insured HECMs; a safe, secure loan that lets you access your home’s equity to get cash for your retirement funding needs. We also offer safe Jumbo-Reverse loans from $500,000 to $6 million dollars. (Finally we have LESS plans from $25,000 to $500,000 that have no age requirements and can use your primary residence, a vacation home or residential investment property as collateral. Click on LESS above to read about how these work.)
The amount you receive is based on current interest rates, the age of the youngest borrower and the lesser of the appraised value of your home, sale price or the maximum lending limit. The funds available to you may be restricted for the first 12 months after loan closing, due to HECM requirements. In general, the older you are, the more equity you have in your home and the lower your mortgage loan balance; the more money you can expect from a HECM loan.
Receiving Your Money
The HECM is available as either an adjustable or fixed-rate loan. With the adjustable rate, the rate is adjusted monthly based on the LIBOR (London Inter Bank Offered Rate). The fixed-rate HECM maintains the same interest rate over the life of the loan. You may need to set aside additional funds from loan proceeds to pay for taxes and insurance.
Repaying the Loan
Loan repayment is not due as long as you meet the loan obligations such as living in the home as your primary residence, continue to pay required property taxes and insurance, and maintain the home according to FHA requirements. You or your heirs will not be required to pay more than the value of your home at the time the loan is repaid; even if your loan balance exceeds the value of your home, provided you or your heirs decide to sell the home. Best of all, any remaining equity goes to you or your heirs once the loan is repaid.