Reverse Mortgage Loans for Seniors

This type of loan allows seniors aged 62 or older to convert a portion of their home equity into tax-free cash income. Sometimes this cash is used for medical and lifestyle expenses. Reverse mortgage cash is also commonly used to fund popular retirement activities like travel.

Reverse Mortgage: The Facts

• To qualify, you must be 62 or older and either own your home outright, or have considerable equity in your home.
• The home must meet standard HUD guidelines.
• A reverse mortgage doesn’t require monthly payments. Most reverse mortgages are paid off when the home is sold.
• A reverse mortgage does not transfer the title of ownership to the bank. The home is still owned by the individual who procures the loan.
• Upon repayment of the reverse mortgage loan, the remaining equity in a home will be paid out to your heirs upon your passing.
• Reverse mortgages do not affect Medicare or Social Security payments as long as specific criteria are met. Discuss with your trusted financial advisor for more information.

The Benefits of a Reverse Mortgage

  1. Get Access to Accumulated Wealth: Many seniors have accumulated wealth through the value of their home, but are unable to access that wealth without selling. A reverse mortgage avoids this issue by allowing seniors to access equity from their paid-off (or nearly paid-off) home.
  2. No Monthly Payments: The homeowner is responsible for property taxes, homeowners insurance, and home maintenance. A reverse mortgage does not have a monthly repayment requirement. Most reverse mortgage loans are repaid upon the sale of the property.
  3. Non Recourse: A non-recourse loan is secured by collateral – in this case – the house. This means that no matter the loan balance, the borrower will never owe more than the home’s market value.
  4. Keep Home: Reverse mortgages allow seniors to access accumulated property wealth without needing to sell and move. Many seniors have spent decades living in their homes and do not wish to move in their golden years. A reverse mortgage allows them to stay in their homes while accessing necessary cash.

HECM for Purchase Program

Reverse Mortgage for New Home Purchase

Are you interested in using the equity from the sale of your current home to fund the purchase of a new home? If you’re 62 or older, you can!

How does it work? Instead of purchasing a new home and then securing a reverse mortgage, the HECM for Purchase program allows you to get your down payment for your new home from the proceeds of the sale of your previous home. The rest of your purchase price comes from the HECM loan.

The lender uses your down payment, your previous home equity, and the value of your new home to calculate the reverse mortgage loan amount. You then receive cash via the reverse mortgage, which must be prepaid upon the sale of your home or when you pass away.

Benefits of HECM Purchase Program for Purchasing a New Home

  • No monthly mortgage payments required.
  • Minimal credit/income requirements.
  • Loans are permitted on new home builds as long as the property is complete and ready to be occupied.

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