| > | | | | When reverse mortgages were first introduced, they |
| If you’re 62 years of age or older, Reverse | | | | allowed the lender to have a stake in the future value |
| Mortgages are a great way to increase your quality of | | | | of the home. In essence, the lender would profit from |
| life. This article provides basic information about how a | | | | your equity even if it extended beyond the original loan |
| Reverse Mortgage works. | | | | amount. Fortunately for seniors, times have changed |
| Reverse mortgages are government insured home | | | | for the better: regardless if your home goes up or |
| loans specifically designed for senior homeowners. | | | | down in value, you will never owe more than the loan |
| This type of loan allows a homeowner to payoff their | | | | amount or your home’s current value, |
| existing mortgage along with a combination of the | | | | whichever is lower. |
| following: establish a credit line, receive monthly checks, | | | | Another question often asked is: can I outlive my loan? |
| or withdraw cash. The amount of cash available | | | | You can never outlive a reverse mortgage loan. So |
| depends on many factors, which we will discuss | | | | long as you are alive and living on the property, you will |
| shortly. | | | | never have a mortgage payment for your reverse |
| If you choose to get cash with your reverse mortgage | | | | mortgage. Nor can a lender take your home away |
| loan, you can choose from the following methods: | | | | from you. As long as you live in your home, pay your |
| Tenure — equal, monthly payments. | | | | taxes and insurance, you can live indefinitely in your |
| Modified Tenure — line of credit combined with | | | | home without making a single payment. |
| monthly payments. | | | | The amount of money that can be borrowed with a |
| Term — equal, monthly payments for a fixed | | | | reverse mortgage is dependent upon many factors, |
| period. | | | | including but not limited to: the age of the borrower, the |
| Modified Term — line of credit combined with | | | | amount of money currently owed on the home, the |
| monthly payments for a fixed period. | | | | interest rate, the value of your home, and |
| Line of Credit — payments or installments at the | | | | FHA’s lending limits for your area. Typically, the |
| borrower’s discretion (much like a standard | | | | older you are and the less money you owe on your |
| credit line — use the money only when you | | | | home, the more you can borrow. However, every |
| choose to). | | | | situation is unique. To get an accurate, approved loan |
| Perhaps the most worthwhile benefit of a reverse | | | | amount, you should speak with an approved reverse |
| mortgage is that the borrower will not be required to | | | | mortgage lender or broker in your local area. Do not |
| make any mortgage payments for the duration of their | | | | be intimidated about contacting a loan broker! HUD |
| stay. That’s right: zero payments for the rest of | | | | requires that you speak with an approved, HUD |
| their life or until they move from the home. As you | | | | counselor prior to any loan funding to ensure that you |
| can imagine, zero house payments could drastically | | | | are fully aware of how a reverse mortgage works. |
| alter a person’s lifestyle in a positive manner | | | | You may call 1-800-569-4287 to acquire a list of FHA |
| and could do so almost overnight. | | | | approved lenders for your particular area. They can |
| In regards to qualifying for a reverse mortgage, there | | | | also give you names and phone numbers for |
| is yet another benefit that is often over-looked: you do | | | | HUD-approved counseling agencies. |
| not need to verify your income since the loan is based | | | | Reverse mortgages are truly designed to help seniors |
| on your home’s value. There are no payments | | | | live a higher quality life. If you or someone you know is |
| to be made, remember? Essentially, you do not need | | | | 62 years of age or older, you should take the time to |
| any income nor do you need an outstanding credit | | | | find out about a reverse mortgage. |
| report. | | | | |