What's a Reverse Mortgage?
• A government insured program that enables senior homeowners to convert a percentage of the homes equity into cash, while retaining ownership.
Who is eligible?
• Homeowners who are at least 62 years of age.
• Properties include: Single Family Homes, Condos, Town Homes 1 to 4 unit dwellings and Manufactured Homes with approved foundation.
• The home doesn't need to be owned free and clear, but must have at least enough equity so that the proceeds from the reverse mortgage can pay off the balance.
• No income
or good credit is necessary to qualify for the program.
What are some of the benefits?
• The title of the property always remains in the homeowners name, never changing ownership.
• The funds may be used in any manner the senior wishes with no restrictions.
• Income received is tax-free, doesn't affect Social Security, Medicare or Medicaid benefits.
• No monthly payments on any of the used money.
• No out of pocket costs to do the program. All fees and interest are deferred until both seniors move out permanently, sell the home or pass away.
How much cash can be received?
• The amount is based on a HUD formula that factors the age of the youngest borrower, interest rate and appraised value.
When is the loan repaid?
• The loan is only due when both homeowners pass away, sell the home or choose to vacate the property.
• The loan must be repaid from the sale of the home or through other resources.
• The estate or heirs can keep the property once the loan is paid. If the home is sold the remaining equity goes to the estate or heirs.
• Reverse mortgages are considered a non-recourse loan. The homeowner never guarantees all money owed will be paid back. If more is owed on the home than what it can be sold for the government is responsible.
What are the cash options?
• Cash lump sum.
• Monthly installments.
• Line of credit that allows you to access cash when you need it.
• Combination of the above.
• All options are tax-free.
