-Travel and Relocation
Many Seniors value experiences more than just stuff. Those who have equity in their home can use the extra cash from their reverse mortgage to be with loved ones or visit the places they’ve always wanted to go. If you’d like to focus on adventure, making memories, or being closer to the people you love, then a reverse mortgage is just the ticket.
Your reverse mortgage can provide you with the funds you need for home repairs or enhancements. If making improvements to stay independent in your own home or creating the perfect space for those family gatherings is your goal, a reverse mortgage can help you build your dream.
Could you retire sooner without a mortgage payment? Are you worried that your retirement savings won’t stretch far enough? With a reverse mortgage, you can eliminate your mortgage payments and reduce or even delay dipping into your savings. If accelerating your retirement timeline sounds attractive, a reverse mortgage may be right for you.
+Minimize Monthly Payments and Assure Your Financial Future
One of the big challenges for Seniors it that rising interest rates cause payments to go up while retirement income remains the same. Wouldn’t eliminating mortgages, car loans, credit cards, and other debts make a big difference? If you’d like financial peace of mind and an improved quality of life, then a reverse mortgage is the solution that can provide you with that security.
Would your retirement be more comfortable with a little extra cash each month? Your equity can provide you with a monthly income.
A loan available to homeowners that allows them to convert part of the equity in their homes into cash.
Instead of making monthly payments to a lender, the lender makes payments to the borrower.APPLY NOW!
-Purchase a Home
You can buy a new home using loan proceeds from the reverse mortgage. Yes, Seniors can purchase a new home and acquire a reverse mortgage all at once. Now a reverse mortgage makes it easy to relocate to sunnier climes, move closer to family, or simply downsize.
+Get Cash in a Lump Sum
When you receive all your loan proceeds upfront and lock in a fixed interest rate, your home becomes more of an annuity than an obligation. You can now use that cash for your dream retirement, to travel the world, or to make those home improvements you’ve been wanting.
+Line of Credit
When you opt for a line of credit, you can withdraw from that line of credit whenever you want for as much as you choose. You will be charged interest only on what you withdraw. You will not be charged interest or fees on the money remaining on your credit line. Also, with a line of credit, the amount that you can borrow actually increases over time. It is always better to have and not need than to need and not have.
+Change Your Monthly Payments to Monthly Income
This option provides Seniors with lifelong, fixed monthly payments that can never decrease. The payments continue as long as the homeowner lives in the home. Do you have increasing medical expenses? Is your cost of living increasing while your income is decreasing? If so, then using a reverse mortgage for monthly income could be right for you.
Why choose when you can get it all? Receive a partial disbursement of funds to take care of current expenses along with a line of credit for future use AND receive monthly tenure payments.
Eligibility is simple, with no complex qualifiers. To apply for a reverse mortgage, you must only meet the following criteria:
In 1961, the reverse mortgage is created. A man at Deering Savings and Loan in Portland, Maine designed the unique loan to help the newly widowed wife of his old high school football coach stay in her home.
In 1983, the first hearing regarding reverse mortgages is held. The senate approves a proposal to insure these loans by the Federal Housing Administration (FHA).
In 1998, Reverse Mortgages Become Federally-Insured. President Ronald Reagan signs the reverse mortgage bill into law. This gives the U.S. Department of Housting and Urban Development (HUD) the authority to insure reverse mortgages through the FHA.
Today, with all of the consumer safeguards added and widespread recognition from the mortgage industry, there are more than one million reverse mortgages.
3 Main Ways to use a Reverse Mortgage as a Financial Tool for Retirement
A reverse mortgage loan is established at the outset of retirement and drawn upon every year to provide retirement income until exhausted. During this time the retiree’s investment has more time to grow. Future withdrawals may be made from the portfolio but meanwhile investments grow for later in life.
For example, a woman is interested in getting a reverse mortgage loan on a $500,000 home that qualifies for an estimated loan of $263,000, referenced on chart1. She can decide to receive this in a line of credit or monthly payments, in which she decides to do until 70 years old. This benefits her because if she decided to receive her social security at age 62 she would only receive payments of $1,958 versus $3,447, almost double of what she would have. By using a reverse mortgage to help delay her Social Security until age 70, she is now eligible to receive a monthly benefit with her reverse mortgage until she can receive the peak of her social security at age 70.
Social Security benefits calculator from http://www.bankrate.com/calculators/retirement/social-security-benefits-calculator.aspxAPPLY NOW!
Drawing on your investments during down turns may lead to a higher chance of draining them during retirement. A reverse mortgage may allow you to reserve your investment portfolio longer. Using this method, a reverse mortgage can be set up at the beginning of retirement to help minimize investment portfolio risk. A reverse mortgage loan can supplement monthly income during portfolio slumps due to market corrections or dips.APPLY NOW!
A line of credit using a HECM Reverse Mortgage Loan can be used and is left to grow at an interest rate equivalent to the current loan rates. This line of credit also contains a compounding feature so accessible credit increases each period on the prior period’s available credit balance. Like annuity payments, the line of credit can be retrieved for cash or converted to monthly term or tenure payments.
Using these strategies, cash reserves are available upfront and assimilated into a retirement plan. These strategies will give your portfolio the necessary time to grow and access to the best possible financial plan for your retirement. While also still being able to live in your home without monthly payments, feeling secure about financial emergencies and having access to a growling line of credit. Also an opportunity to maximize social security and maintaining your desired quality of life.
You must maintain your home as the principal residence, pay all taxes, insurance, maintain the home and comply with loan obligations to lender.
-What is a reverse mortgage?
It is a certain type of loan that lets you convert a portion of the equity in your home into cash. The equity that has built up over years of making mortgage payments can be paid back to you. Instead of making monthly payments to a lender, the lender makes payments to the borrower. Borrowers repay the loan once the last surviving spouse on title dies or moves out permanently from the home. (HUD’S definition of permanently moving out means 12 months + 1 day.) You can also purchase a primary residence with a reverse mortgage. You can use money from bank accounts, retirement funds, pension plans, annuities or any other verifiable account.
+What specifications do I need to meet in order to qualify?
In order to qualify, you and your spouse must be 62 years of age or older. You must be the titleholder to your home. You must have sufficient equity in your home and meet the financial eligibility criteria established by HUD. You will also need to fulfill the counseling requirements per HUD guidelines.
+What if I currently have a mortgage, what happens to it?
If you currently have a mortgage, you are not alone. You may pay off your mortgage with any funds or the funds you receive from your reverse mortgage will be used to pay off any existing mortgage at closing.
+How will my loan be paid back if there are no monthly payments?
The loan may be paid off by selling the home, refinancing the reverse mortgage into another mortgage, or if the heirs qualify, they can apply for and obtain their own reverse mortgage to pay of the existing reverse mortgage.
+What makes my home eligible?
To qualify, the property may be: a double wide manufactured home built after 1976; a single family residence; an owner occupied unit in a duplex, triplex or 4-unit apartment complex; or an FHA approved condominium.
+Will the bank take my home or will I still own it?
THE TITLE NEVER CHANGES. You will still be the owner of your home and you can stay in it for as long as you desire. However, you must continue to pay your taxes, insurance and maintain the home according to FHA requirements.
+What happens to property taxes and insurance?
With a reverse mortgage loan you are still responsible for maintenance as well as paying property taxes and insurance.
+How much of my home’s equity can I access with a reverse mortgage loan?
The loan amounts will differ based on a number of factors. These factors include, the age of the youngest borrower, which reverse mortgage loan product you choose, current interest rates, the lesser of the appraised value of your home and the sale price or FHA lending limit.
+How am I allowed to use my money?
If you have an existing mortgage you will pay that off first. The money you receive from your loan after this can be used in any way you choose. This can be for travel, medical expenses, renovation, and retirement dreams. There are no limits.
+What costs should I be concerned about with a reverse mortgage loan?
There are closing, counseling, and other costs just as with any other loan. However, most fees can be financed as part of the loan. The HUD counseling fee is the only out-of-pocket cost. A good faith estimate will be provided at time of application, but prior to application you will be provided with a closing cost worksheet disclosing all closing costs.
+Will I have to pay taxes on my funds?
No, the money you receive is tax-free because it is not considered income.
+Does this loan affect Social Security or Medicare benefits?
More often than not HECM reverse mortgage loans do not affect your Social Security or Medicare benefits. Regulations vary for the Federal Supplemental Security Income program and for state-administered programs such as Medicaid, and food stamps. We suggest that you consult a benefits specialist in your area agency for these programs to determine how HECM payments may affect your personal situation.
+What penalties will occur if I pay back the loan early?
No penalties. You can pay back the loan at any time without being in jeopardy.
+How do I receive the funds from my reverse mortgage?
You may choose to receive a single lump sum, regular monthly installments, a line of credit or any combination of the options. However, the most frequently used way is to draw from a line of credit to use at your judgment.
+Will my family or estate ever owe more than the value of my home?
No, you will never owe more than the appraised value of your home when the loan is due with an FHA-insured non-recourse reverse mortgage. You can simply sell your home and repay it that way.
+What if we planned to leave our home to the kids?
You are always able to leave the home to your kids or anyone you chose. When the loan becomes due, you or your heirs have the option of paying off the balance of the loan and keeping the home.
+What should the heirs do in the event that the person with the reverse mortgage passes?
You will need to contact the loan servicer to notify them that the borrower(s) has passed. You can typically find the servicer’s contact information on the monthly statement. Once the loan servicer has been notified, they will help the heirs with the necessary next steps.