What is a reverse mortgage?
A reverse mortgage is a home loan (used for any purpose) where seniors,
62 and older, can access the equity (cash) built up in their home.
There are several different reverse mortgage programs. Fannie Mae Home
Keeper®, Jumbo Cash-Out loan, and the HUD-insured Home Equity Conversion
Mortgage (HECM) are three such programs. As demand increases, more
reverse mortgage programs from different organizations will become
available.
It is called a reverse mortgage because you borrow money from a lender,
but the lender makes monthly payments to you, rather than you making
monthly payments to the lender. All interest is paid at the end of the
loan, rather than in the beginning.
What are some of the benefits of a reverse
mortgage?
- Strengthen your personal and financial independence.
- Help pay for health care or other needs.
- You can never lose your home in foreclosure as long as you maintain the
property tax and insurance payments.
- The loan is only paid off when the house is sold by you or your heirs,
or all borrowers move out of the house.
- Keep your Medicare or Social Security benefits.
- Use it as a credit line and draw upon it as needed.
- Get all your cash right away.
- Get the best of both—get cash now and have a balance in reserve to use
as a credit line.
- No Income Requirements: The homeowner does not need to be working and
is not qualified based on income.
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