A reverse mortgage can be an effective tool for giving seniors additional cash to live on using the equity in their home. However, it is not a decision to be taken lightly. It’s important to work with an experienced originator who can help you assess your unique situation to determine if a reverse mortgage is right for you.
LET YOUR HOME TAKE CARE OF YOU WITH A REVERSE MORTGAGE
Reverse mortgages were created specifically for senior homeowners, allowing them to make the most of the equity they've acquired in their homes. With a reverse mortgage, you borrow against the equity you've established in your home and do not need to repay the loan for as long as you live in, maintain your home, and pay property taxes and insurance. Rather than making monthly mortgage payments, you receive them. Depending on your financial situation, a reverse mortgage has the potential to help you stay in your home and still meet your financial obligations.
We realize that reverse mortgages may not be right for everyone, and encourage you to be armed with reverse mortgage info for your families and advisors by gathering information and discussing your specific needs with your family members and your financial, legal, and tax advisors. I am dedicated to helping you throughout this process and am available to answer any questions you may have.
REVERSE MORTGAGES VS. TRADITIONAL MORTGAGE OR HOME EQUITY LOANS
A reverse mortgage is the opposite of a traditional mortgage. With a traditional mortgage, you borrow money and make monthly mortgage payments. With a reverse mortgage, however, you receive money from the lender based on the value of your home, the age of the youngest borrower, and the interest rate of your loan. You don't re-pay the loan for as long as you live in, maintain your home, and pay property taxes and insurance. The loan must be repaid when you pass away, sell your home, or no longer live in the home as your principal residence.
BASIC TYPES OF REVERSE MORTGAGES
HECM: A Home Equity Conversion Mortgage, or HECM, is the only reverse mortgage insured by the U.S. Federal Government, and is only available through an FHA-approved lender, such as Generation Mortgage Company. There are three major HECM products:
HECM Standard: The most popular type of reverse mortgage, allowing seniors to access the most cash possible.
HECM Saver: The HECM Saver was designed for seniors seeking to borrow smaller amounts of money and maintain more of their home equity.
HECM for Purchase: Allows you to purchase your next home with cash from your reverse mortgage.
Jumbo Reverse Mortgage: We also offers one of the country's only Jumbo Reverse Mortgage, which is designed for seniors with higher-valued homes and allows access to greater amounts of home equity than is typically available from FHA-insured HECM Reverse Mortgages.
HOW MUCH CAN BE BORROWED?
In general, the more your home is worth, the older you are, and the lower the interest rate is, the more you'll be able to borrow.
The maximum amount that can be borrowed is based on several factors:
• Age—of the youngest borrower at the time of the loan
• Value—the appraised value of the home
• Interest Rate—the interest rate at the time your take out the loan
• Equity—the more equity in your home, the more you can borrow
• Mortgage Program—there are several mortgage programs and options to choose from and each affects the amount borrowed.
ELIGIBILITY REQUIREMENTS FOR REVERSE MORTGAGES
The eligibility requirements are quite simple.
• Homeowners must be 62 or older and occupy the property as their principal residence
• The home must be owned free and clear or have a remaining mortgage balance that can be paid off by proceeds from a reverse mortgage
• The property must be a single-family or a two-to-four unit dwelling
• Townhomes, detached homes, condominium units, planned unit developments and some manufactured homes are eligible
• The home must meet HUD minimum property standards.
A REVERSE MORTGAGE ADDS PROTECTION
A reverse mortgage is a non-recourse loan, which means that the borrower (or the borrower's estate) of a reverse mortgage will not owe more than the loan balance or the value of the property, whichever is less. If the borrower or representatives of his or her estate choose to sell the property to pay off the reverse mortgage loan, no assets other than the home will be used to repay the debt. If the borrower or his or her estate wishes to retain the property, the balance of the loan must be paid in full.
