This is a loan program is designed for individuals ages 62-years or older who have established equity in their home. This allows you to turn your home equity into tax-free** cash without having to make monthly mortgage payments (must continue to pay property taxes and home owners insurance). Allow our team to work with you, your family, financial advisor to see if this option would be a good fit for you.
Benefits of Reverse Mortgages
No Monthly Mortgage Payment (Borrower must still pay taxes, insurance, and maintain the home)
Potential Cash Flow
Access to Equity/Cash in your home to consolidate bills
Potential Line of Credit Established for Access to Cash as Needed Down the Road
You immediately sign over ownership to your home.
You retain title to your home as long as you meet the loan guidelines and requirements such as: maintaining the property, paying all property charges such as property taxes, homeowners insurance, flood insurance, and homeowners association dues (if applicable), and avoiding extended absences from the home longer than six months.¹
Your children will be responsible for repaying the loan when you die
A reverse mortgage is a non-recourse loan, meaning that the lender can only be repaid from the proceeds of the sale of the home and not more than the value of the home. That means even if the home decreases greatly in value, the maximum repayment amount can only be up to the value of the home. While your heirs will not be responsible for the loan repayment, they will still have the option to refinance the loan to purchase it for themselves.
You must have your first mortgage paid off before you can qualify for a reverse mortgage.
While any debt on your home’s title must be paid off at closing and you must have adequate equity in the property, it is not required that you own your home “free and clear” before getting a reverse mortgage.
If you take out a reverse mortgage loan your children won’t be left with any of the home equity.
While the amount of equity typically decreases over time with a reverse mortgage, it doesn’t mean there will be no equity left when the last borrower dies. There are several factors that go into how much equity will be left, such as home appreciation, length of the loan, and optional monthly payments. There can still be equity left for your children.
A reverse mortgage requires that you make monthly mortgage payments.
While you can choose to make mortgage payments, they are not required with a reverse mortgage. The borrower is still responsible to maintain the property, pay property taxes, homeowners insurance, flood insurance, and homeowners association dues (if applicable).¹
You are not allowed to sell your home if you have a reverse mortgage.
You can sell your home if you wish and – just like any other mortgage loan – you must pay off the reverse mortgage at closing. There are also no prepayment penalties if you choose to pay off your loan early or make loan payments.