There are lots of reasons to investigate what a Reverse Mortgage may be able to do for you. Also known as a Home Equity Conversion Mortgage (HECM), a Reverse Mortgage is a smart, safe retirement tool.

These are unprecedented times. The current market downturn, high unemployment, and historically low rates are driving an increase in Reverse Mortgage volume. It is a popular option to add to the security of retirement.

Lower rates on a reverse mortgage present unique opportunities to access a higher percentage of the value on a home.  This means more funds available for the homeowner. As long as you maintain the home in good condition a larger current mortgage may be able to be paid off and the monthly mortgage payment eliminated. This would add to the homeowner’s monthly cash flow, even though payment of property taxes, property insurance, HOA dues, and maintenance of the home are still required to be paid. The Reverse Mortgage loan balance growth over time, with interest and FHA insurance being added on, will be slower due to the low rates. No monthly payment on the loan balance is required.

Some large banks have tightened qualifications or stopped taking applications for home equity lines of credit, (HELOCS).  The HECM line of credit may be a better option if you are age 62 and older.

Benefits of a HECM

  • You remain the owner of your home.
  • There are no monthly payments required on a reverse mortgage, other than property taxes, property insurance, and any homeowner’s association dues.
  • A HECM line of credit cannot be frozen or revoked due to a change in value.
  • The HECM loan does not need to be repaid until you sell the house, or you no longer live in the home as your primary residence and all of the terms of the HECM loan are followed.
  • There are no prepayment penalties or annual fees.
  • If you have no mortgage or lien on your home,  many more options are available to you, such as a combination of a Line of Credit, and monthly income.
  • A monthly tenure payment may also be available for as long as you have your Reverse Mortgage.
  • Funds may be used for almost any reason.

Contact me NOW to find out your options under a Reverse Mortgage. 

Limitations and restrictions may apply. Borrower must maintain home as principal residence, pay all taxes, insurance, maintain the home, and comply with all other loan terms. This post is not from HUD or FHA and has not been approved by any government agency.