Reverse Mortgage
what is a reverse mortgage?
A reverse mortgage allows homeowners who are over the age of 62 to tap into the equity they’ve built up in their home — through a lump sum, a fixed monthly payment, or a line of credit.
how are reverse mortgages different than conventional mortgages?
The biggest difference between the two is that a traditional mortgage requires a monthly payment and a reverse mortgage does not. However, there are many differences between the two loan options. Depending on your unique situation, one will be a better option than the other.
will I lose ownership of my home if I take out a reverse mortgage?
No! With a reverse mortgage, you maintain ownership of your home — as long as you occupy it as your primary residence, pay your property taxes and insurance, and maintain the property according to the Federal Housing Administration (FHA) requirements.
can I use a reverse mortgage to purchase a home?
Yes! If you are aged 62+ and would like to purchase a home, but would also like to retain as much of your cash savings as possible (for future medical expenses, travel, unexpected bills, etc.), you might benefit from a reverse mortgage for purchase.
what is a reverse mortgage line of credit?
A reverse mortgage with a line of credit is one option for retirees that can help them manage their assets most effectively. The money withdrawn from a reverse mortgage line of credit is nontaxable, so a retiree will need to withdraw less each month than they would from a taxable retirement account.
can a reverse mortgage help me maximize my Social Security benefits?
In the right situation, yes! Retirees who wait to claim their Social Security benefits until age 70 have an increased monthly social security income. This is where a reverse mortgage can be especially beneficial to people over the age of 62 who may be paying a conventional mortgage.
Property and borrower eligibility requirements apply. Loan becomes due and payable when the last remaining borrower (or eligible spouse) sells the property, permanently leaves the home or passes away. Taxes, insurance, and repairs are the responsibility of the borrower and must be maintained to avoid early repayment of the entire loan amount. Consult a tax advisor for questions about tax and government benefit implications.
