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Reverse Mortgages
Reverse mortgages (also called home equity conversion loans) enable elderly homeowners to tap into their equity without selling their home. The lender pays the senior money based on the equity that has been accrued in the home. The senior will receive a lump sum payment, a monthly payment, and/or a line of credit. Repayment is not necessary, as long as the borrower lives in the home. If the senior sells the property, moves into a retirement community, or passes away, the loan will need to be repaid by the borrower or their estate. The cash received from the reverse mortgage plus interest and other finance charges to the lender will need to be repaid, normally within 18 months.
Most reverse mortgages require the borrower be at least 62 years of age, have a very low balance owed against their home (ie: 50% at age 62) and maintain the property as their principal residence.
Reverse Mortgages are ideal for homeowners who are "house rich and cash poor" like retired people, those no longer working, or anyone needing to supplement their income. Interest rates can be fixed or adjustable and the money is nontaxable and does not interfere with Social Security or Medicare benefits. Your lender cannot take property away if you outlive your loan nor can you be forced to sell your home to pay off your loan even if the loan balance grows to exceed property value. Please note that the borrower is responsible for taxes and insurance payments, they will not be escrowed.
You can also use a Reverse Mortgage to purchase a home. Let's say that you own a home and want to buy down, you can sell your house and use the procees to purchase a new home using a Reverse Mortgage. The benefit is that there is NO monthly payment!
If you are interested in a home mortgage for yourself or your loved one, please contact me for a consultation.
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Today's Rates:
| 30-yr Fixed | 3.87% | 4% | | 15-yr Fixed | 3.14% | 3.31% | | 1-yr Adj | 2.76% | 3.42% |
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