Is a Reverse Mortgage a Good Option for Seniors?
Whether you are a senior looking for loan options to refinance or purchase a property, or whether you are caregiver looking to help out a senior friend or family member, it is important to know your options. Here are answers to some of the most common questions that people ask about reverse mortgages.
Reverse Mortgages - Home Equity Conversion Mortgage (HECM)
What is a Reverse Mortgage?*
A Reverse mortgage allows homeowners 62 years and older to access to some of the equity in their homes. Reverse Mortgages (HECMs) are insured by the Federal Housing Administration (FHA). Note that not all reverse mortgages are federally insured.
What Are The Benefits of a Reverse Mortgage?*
✔ You can stay in your home.
✔ Funds from you home's equity are available when you need it .
✔ You may receive your funds as a monthly payment, a line of credit, a lump sum payment or as a combination of all of these.
✔ This loan may be able to help you with your financial and retirement planning (Speak to a certified financial advisor for more information - we do not offer financial retirement advice).
Who is Eligible for a Reverse Mortgage?*
You must meet the following eligibility criteria to pre-qualify for a reverse mortgage::
✔ You must be at least 62 years old.
✔ Take a HUD approved counseling session and receive a certificate of completion.
✔ You must live in the home as your primary residence.
✔ Current mortgage balance must be low enough that it can be paid off with the loan proceeds.
What Properties are Eligible for a Reverse Mortgage?*
Reverse Mortgages follow FHA property eligibility standards:
✔ Single family homes.
✔ 2 to 4 unit properties.
✔ An FHA approved condominium.
✔ Manufactured housing (needs to be on a permanent foundation).
Things to Consider*
✔ Counseling: Before you apply for a Reverse Mortgage, you must first consult a HUD housing counselor in order to help you determine whether a Reverse Mortgage (HECM) is right for your particular situation.
✔ Repayment: Unlike a traditional mortgage in which you make monthly payments, a Reverse Mortgage (HECM) uses the equity in your home in order to provide you with proceeds. The mortgage becomes due when you pass away, sell your home, or move out. If you pass away, your heirs can pay the loan by selling the home or by refinancing it.
✔ Responsibilities: You’re still responsible for property taxes and homeowner’s insurance.
*All applications are subject to credit, property and income approval. This is not a commitment to lend. Speak to a licensed loan officer for more details about available loan products and full eligibility requirements. Loan products are subject to change and may not be available in all cities or states.