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What Is a Reverse Mortgage?
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Reverse Mortgage
Instead of making monthly payments to a lender, the lender makes payments to the borrower
A reverse mortgage is a loan available to homeowners, 62 years or older, that allows them to convert part of the equity in their homes into cash. The product was conceived to help retirees with limited income use the accumulated wealth in their homes to cover basic monthly living expenses and pay for health care. However, there is no restriction on how reverse mortgage proceeds can be used.
The loan is called a reverse mortgage because instead of making monthly payments to a lender, as with a traditional mortgage, the lender makes payments to the borrower.
The borrower is not required to pay back the loan until the home is sold or otherwise vacated. As long as the borrower lives in the home he or she is not required to make any monthly payments towards the loan balance. The borrower must remain current on property taxes, HOI insurance and association dues (if applicable).
How a reverse mortgage works
- You borrow money based on the value of your home, your age, and current interest rates.
- The loan will first pay off your existing mortgage (if you have one). The rest of the money is yours to use however you want.
- You can make payments if you want, but it is not required.
- You can choose to receive your proceeds in the form of a lump sum, monthly payments, a line of credit, or any combination of the three.
- You are still responsible for paying property taxes, homeowners insurance, and home maintenance costs.
Contact Us Anytime for a Confidential Consultation of Your Mortgage Options.
Terms, conditions & restrictions apply. Subject to underwriting approval. Application required; not all applicants will be approved. Property insurance and other documentation may be required. Loan secured by a lien against your property. Consolidating or refinancing debts may increase the time and/or the finance charges/total loan amount needed to repay your debt. Fees and charges may apply, and may vary by product and state. Taxes & insurance extra. Appraisal and other fees paid outside of closing (POC) are non-refundable. Important information relating specifically to your loan will be contained in the loan documents, which alone will establish your rights and obligations under the loan plan. Call for details.
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