What is a Reverse Mortgage?
This increasingly popular home loan allows home owners 62 or older to borrow against the equity in their home without having to repay the loan for as long as they live in and maintain the home. Instead of making monthly mortgage payments, the homeowner receives monthly payments or the ability to access a line of credit.
How does a Reverse Mortgage work?
Unlike ordinary home equity loans, a FHA reverse mortgage HECM* does not require any monthly payments or repayment of any type as long as the home is your principal residence.
How much can you borrow?
The amount you can borrow depends on the combination of several factors:
- The age of the youngest borrower
- Current interest rate
- Lesser of appraised value or the HECM FHA mortgage limit
- Other loan fees
Generally, the more valuable your home is, the older you are, and the lower the interest, the more you can borrow. For an estimate of the HECM cash benefits based on your age, home value and current interest rate, contact Reverse Mortgage Direct.
How is the money from a reverse mortgage dispersed?
You can select from five payment plans
- Tenure – equal monthly payments as long as at least one borrower lives and occupies the property as a principal residence
- Term – equal monthly payments for a fixed period of months
- Line of Credit – at times and in amount of your choosing until the line of credit is exhausted
- Modified Tenure – combination of line of credit plus scheduled monthly payments
- Modified Term – combination of line of credit plus monthly payments for a fixed period of months.
The line of credit has a guaranteed growth rate applied to the unused portion of the line of credit. The unused money on the line of credit grows at .5 over the current interest rate. For example, if your current rate of interest is 5, the line of credit is getting larger by 5.5 per year. For people who do not need money now but think they may in the future, this is a great way to protect your equity and ensure that you have access to a guaranteed amount of money in the future for you or your spouse.
Reverse Mortgage Qualifying Criteria
- The home owner must be 62 years of age or older
- Own the property outright or have a small mortgage balance
- Occupy the property as your principal residence
- Not be delinquent on any federal debt
- Participate in a consumer information session given by an approved HECM counselor
- No income or credit qualifications are required of the borrower
- No repayment as long as the property is your principal residence
- Closing costs may be financed into the mortgage
The following eligible property types must meet all FHA property standards and flood requirements:
- Single family home or 1-4 unit home with one unit occupied by the borrower
- HUD approved condominium
- Manufactured home that meets FHA requirements
Free the Funds to Live on Your Own Terms Longer!
Use the proceeds to maintain your lifestyle pay for in-home care…buy long term care insurance…retire debts…pursue new interests!
- No income or credit requirements
- No monthly payments while you live in your home
- Flexibility in how your receive payments
- Qualify even if you have a mortgage
About Reverse Mortgage Direct
Reverse Mortgage Direct works with several reliable organizations – big names you know and trust – to find the very best FHA-Insured reverse mortgage loan for your needs that will provide the highest proceeds with the lowest rates and fees. As independent experts, we work in YOUR interest, providing the assurance of greater choice than if you went directly to any lender. Plus, we work to help educate every customer on the best way to receive the funds to maintain or increase your standard of living.
Live your Retirement Comfortably and In Your Own Home !
A reverse mortgage may be your solution
Contact me for information:
Nancy Bolt, Senior Mortgage Consultant,HECM Solutions Specialists, NMLS 200643
Reverse Mortgage Direct of California, Inc. NMLS 937977