A Reverse Mortgage is a unique tool to convert some of your home's equity into cash you can spend now. With a Reverse Mortgage, you do not have to repay the loan for as long as you live in the home and you will never owe more than your home is worth. To qualify, you and any co-borrower must be at least 62 years old and own your home. This home must be your primary residence, but it does NOT need to be fully paid for. The best part is; there are no income or credit requirements to satisfy.
As long as the homeowner lives in the house and keeps the taxes and insurance paid, there are no payments required. In the event of the death of one of the borrowers, the loan remains in place for the survivor (if it was a joint application). The loan is repaid from the sale or refinance of the home when the senior no longer lives in it. Any remaining equity belongs to the senior or the heirs.
Use your Reverse Mortgage for extra income, to pay off your present mortgage, consolidate debts, do home improvements, travel, help your children or grandchildren - anything you want. It's up to you!
The amount of money you can receive is based upon the age and number of borrowers, the value of the house, current interest rates, the maximum loan amount and the program you select. Payments received from a Reverse Mortgage are considered to be a loan, not income. Therefore, the funds received are NOT subject to income tax and do NOT affect Social Security Benefits. Borrowers receiving Medicaid or SSI may not be affected if the funds from the Reverse Mortgage are spent in the month they are received. As always, we recommend you consult your own tax advisor for further details.
There are several Reverse Mortgage programs available; the FHA insured Home Equity Conversion Mortgage (H.E.C.M.), the Fannie Mae Home Keeper and the Financial Freedom Cash AdvantageŽ. The FHA H.E.C.M. is by far the most popular. |
