Increased Cash Flow
You can access cash from a portion of your home equity without incurring income tax* (generally, it won’t affect your Social Security and Basic Medicare benefits). You can use the funds how you want.
You have the option to repay as much or as little of the loan balance each month as you would like, or you can make no monthly mortgages payments at all. Of course, you must still maintain the home and pay homeowners insurance and property taxes, just like a traditional mortgage.
The FHA guarantees no repayment of the loan is required until the last borrower moves out or passes away. When you move out of your home, you or your estate has up to 12 months to repay the loan balance, which is typically achieved by selling the home.
The FHA guarantees that if the balance on the loan exceeds the home value at the time the home is sold, neither you nor your heirs will be responsible for paying the deficit (the FHA will pay it). If there are excess proceeds from the sale of your home, you (or your heirs) would receive them.
- You remain on the title and you own the home.
- You can sell your home at any time.
- Line of credit growth feature.
With a HECM reverse mortgage line of credit, the unused portion of the line of credit will grow each month at the same rate as the loan balance. In other words, you will have access to even more funds over time, regardless of home value.
What Is a Reverse Mortgage Loan, or HECM?
Common Uses of a Reverse Mortgage
Refinancing Your Existing Home Mortgage Loan
If you are carrying mortgage in retirement, refinancing to a Reverse Mortgage Loan eliminates your obligation to make required monthly mortgage payments. You must maintain the home and pay your homeowners insurance and property taxes.
Supplement Cash Flow with a Steady Stream of Funds
Bridge the Medicare Gap From Age 62 to 65
Use as a Standby Line of Credit
Fund Major Expenses, Such as In-Home Care or Home Renovations
How to Enjoy a Better Retirement
Did You Know?
You can also use a Reverse Mortgage Loan to BUY a new home that better fits your needs in retirement. This home financing option is called a HECM for Purchase.
Loan Proceeds are Taken:
- A lump sum payout
- Fixed monthly advances
- Tenure (life of the loan)
- Term (set period of time)
- A line of credit
- A combination of monthly payments and a line of credit
The borrower(s) must:
- Be 62 years or older
- Live in the home as his or her primary residence and either own the home outright or have significant equity in the home
- Meet minimum credit and property requirements
- Must receive reverse mortgage counseling from a HUD-approved counseling agency
- Must not be delinquent on any federal debts
- Single family residence
- 2- to 4-unit properties
- Manufactured homes
- Modular homes
- Planned unit developments
- FHA-approved condominiums
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*This advertisement does not constitute tax or financial advice. Please consult a tax and/or financial advisor regarding your specific situation.