A reverse mortgage* is a way for seniors to turn their home’s equity into cash to meet any financial need. Unlike traditional home equity loans, a reverse mortgage does not require repayment until the home is sold, or the last borrower permanently leaves the home. Borrowers are responsible to cover taxes, insurance, HOA fees, and property maintenance, just like any other mortgage.
Call me if you have any clients who could benefit from a reverse mortgage. 401.330.7317. *The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance. The borrower must maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.
*A reverse mortgage increases the principal mortgage loan amount and decreases home equity (it is a negative amortization loan). When the loan is due and payable, some or all of the equity in the property no longer belongs to borrowers, who may need to sell the home or otherwise repay the loan with interest from other proceeds. Lender charges an origination fee, closing costs and servicing fees (added to the balance of the loan). Monthly service fees are not assessed in Texas. The balance of the loan grows over time and Lender charges interest on the balance.
This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency.
Reverse mortgage borrowers may use the proceeds however they wish. Some examples include: pay off a mortgage, pay off credit cards, pay off home equity loans, make home repairs, pay property taxes, stop foreclosure, travel, or purchase a home.
That will depend on your age, the interest rates, and your home’s value. Older borrowers generally qualify for more funds.
The loan becomes due when the home is no longer the borrowers principal residence. This happens when the borrowers die, the home is sold, or the borrowers live in a nursing home for 12 months or more.
After the borrowers have passed, the heirs have multiple options. They may choose to sell the home, refinance the home, pay off the home, or walk away through the use of a deed-in-lieu of foreclosure. If the heirs decide to sell or refinance, the reverse mortgage is paid off at closing and any remaining equity becomes their inheritance. If you owe more than your home is worth but sell your home for the appraised fair market value, the remaining balance will be paid by mortgage insurance.
No. A reverse mortgage allows homeowners to retain the title and ownership of their home for as long as they live in the home and the loan remains in good standing. Like other loans, this requires the borrower to keep up with property taxes, insurance and maintenance.
