Details of A Reverse Mortgage

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“Home is where we start from.”
T.S. Elliot

 

 

Reverse Mortgages for Long Term Care Planning. Listen here.

What is a reverse mortgage?

A Reverse Mortgage is a mortgage that allows a homeowner 62 or older to use the equity in your home to receive cash while continuing to own and live in it.

Reverse Mortgages are different from conventional home equity loans:                     Minnesota Reverse Mortgage Borrower Prepared for Future

  • No monthly mortgage or immediate repayments*
  • Income or credit does not impact the interest rate
    • Borrowers income and credit are used for a financial assessment to determine ability and willingness to pay property taxes, insurance, HOA dues if applicable
  • Re-paid when the home is no longer the primary residence of the borrower(s)

Types of Reverse Mortgages:

  • FHA insured Home Equity Conversion Mortgage (HECM)
  • Proprietary programs (programs owned by private or public companies)

Click here to learn more about the Reverse Mortgage Products.

To become familiar with terms used in association with reverse mortgages visit our Reverse Mortgage Dictionary.

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You may qualify if…
  • You are a homeowner 62 years old or older"The only way we could comfortably stay in our home of 42 years."
  • Your home is your primary residence
  • You have enough proceeds to pay off any current mortgages or liens, if there are any
  • Your home meets HUD minimum property standards or can be brought up to their standards using the Reverse Mortgage proceeds
  • Meet HUD’s requirements for income and credit history for documenting their ability to pay property taxes and insurance

Take a closer look if you want…
  • to use cash from your substantial equity now
  • to stay in their home of many years  
  • to eliminate the current mortgage payments*
  • funds for estate, financial, or long-term care planning
  • to move to a smaller home, purchase a 2nd home or investment property without monthly mortgage payments
  • cash to pay bills, fulfill dreams, or meet goals
Tom’s health was failing and his family wanted him to stay in his home rather than move to a nursing home. To afford the necessary home health care, a Reverse Mortgage was done.
Consider the Advantages
  • Retain ownership of home without the risk of losing it from not making mortgage payments – you don’t have to make monthly mortgage payments but you have to abide by the terms of the loan*
  • Access immediate cash – generally not considered taxable income (consult tax advisor)  Grandpa staying in home with a reverse mortgage
  • Receive cash to be used for any purpose
  • Receive a tenure or term monthly payment, a line of credit, a lump sum or a combination of these to meet your needs
  • Ease financial worries and pressures
  • Stay in home longer or purchase a new home without having monthly mortgage payments*.
  • Maintain or raise current standard of living
  • Use equity for long-term care planning
Earl and Ruth did a Reverse Mortgage to be prepared for an emergency if something were to happen to one of them.

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Look At The Features
  • Instead of making monthly mortgage payments*, borrowers receive money in monthly payments, line of credit, lump sum, or a combination of these.
  • The HECM is a government insured program.
  • The loan amount depends on the age of the borrower(s), appraised value of the home or the mortgage lending limits (whichever is less), the current interest rate, and the program chosen.
  • Loan origination and closing costs are financed by the loan other than the appraisal.
  • Social Security and Medicare are not affected and generally not SSI or other public benefits. (consult with legal services for your situation)
  • Available balance in line of credit grows so more funds are available in the future.
  • No personal liability; borrowers or their estate are never required to pay more than the value of the home at the time of repayment.
  • Equity remaining after the payment of the loan is the borrowers or their heirs.
  • In the case of joint borrowers, when one of them dies, the mortgage stays in place as long as the other borrower has the home as their primary residence.
  • Borrowers are required to receive third-party counseling by a HUD approved counselor to help them determine if a Reverse Mortgage is right for them.
  • Borrower(s) are still responsible for property taxes, insurance and maintaining the property.

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Reverse Mortgage borrowers staying in homeFrank and Emma were a vibrant 90 and 86 year old couple. They found that each month they were short money to even buy milk. Their son-in-law and daughter assisted them in obtaining the Reverse Mortgage. They are so pleased that they now can live more comfortably. They used the proceeds to receive a monthly payments to supplement their Social Security. They also took out a lump sum to fix up their home and left enough in their line of credit to use as future needs arise.

*Borrowers are responsible for property taxes, hazard insurance, maintaining property and abiding by terms of the loan or could face foreclosure.

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Find out if a Reverse Mortgage would benefit you.
Call:
Reverse Mortgages SIDAC
The Experts Excelling In Service
651-762-9648     •     Toll Free 1-877-590-9648

Understanding Reverse Mortgages Book Cover

Minnesota Residents Call Us to learn how to receive a FREE copy of the reverse mortgage guide, Understanding Reverse Mortgages, a  book written in a simple format, providing the necessary information and knowledge to comprehend the basics of Reverse Mortgage.