It can be scary making a major decision concerning your biggest investment, the place that means the most to you. Deciding whether a reverse mortgage is right for you takes much thought and consideration. I hope that the material on my website helps you in this endeavor and that I have the opportunity to get to know you and your financial goals personally.
I would love the opportunity to speak with you and provide you with a no-obligation reverse mortgage evaluation or quote. Please don't hesitate to give me a call or contact me today.
Explore some common reverse mortgage “What if” scenarios on a recent article published by Lisa Korn. Click here to read the article.
A reverse mortgage is a loan that allows people 62 and older to access a portion of the equity in their home without requiring a monthly principle or interest payment for the life of the loan. The amount of money accessible is based on the value of the home, existing loan amounts, and the age of the youngest borrower. Similar to a forward mortgage, the reverse mortgage borrower is required to make property tax and homeowner's insurance payments, maintain their property's condition and reside in the home as their principle residence. The loan proceeds may be taken as a lump sum, tenure payment (a fixed amount ongoing for the remainder of the time you live in your home), a term payment (a set amount of money for a fixed number of years) a line of credit, or a combination of these payment options. A reverse mortgage can also be used to purchase a home.
The amount of equity a borrower can access depends on their age, property value, existing mortgages to be refinanced, and the prevailing interest rates. The lender uses the age of the youngest borrower for this equation. The older you are the higher the percentage of equity you can access.
Who can qualify for a reverse mortgage?
In general, a homeowner over the age of 62 with sufficient equity can qualify. The prospective borrower will go through a financial assessment to assure they can afford their ongoing financial obligations including property taxes and insurance.
How much equity do I need to get a reverse mortgage?
The percentage of equity a homeowner can access depends in large part on their age. The older a person is the higher the percentage of equity they can access.
Can I pay off my reverse mortgage early? If so, how do I do that?
The types of homes eligible for a reverse mortgage include single-family residences, condos/ townhomes, Planned Unit Developments (also known as PUD's), manufactured homes, and 2-4 unit properties as long as the borrower lives in one of the units as their primary residence.
What happens to my reverse mortgage when I die?
When the borrower no longer lives in the home as their principle residence the loan will become due. At that time the borrower, or their heirs, can sell the property, refinance the loan, or pay off the loan with other assets. Once the loan is paid off, any additional equity goes to the borrower, or their heirs, as it would with a forward mortgage.