Types of Reverse Mortgages:
If you own your own home, and are at least 62 years of age, you may be eligible for a reverse mortgage. A reverse mortgage provides an opportunity to manage their retirement finances by converting a portion of their home equity into liquid assets. When used, a reverse mortgage allows you to refinance your home, in order to tap into its equity.
The nice thing about reverse mortgages is that you don’t have to repay the loan during your lifetime as long as you are living in the home and you have not sold it. You are; however, still responsible for paying property taxes, insurance, homeowner’s association dues, and any other charges related to your property.
Reverse Mortgage Purchase
As with a reverse mortgage, a reverse mortgage purchase allows seniors, age 62 or older to tap into their primary residence’s equity. A reverse mortgage purchase; however, allows you to purchase a new principle residence and obtain a reverse mortgage within a single transaction.
A reverse mortgage purchase also allows seniors to relocate to other geographical areas in order to be closer to family members. It can also help them relocate to a home that is more affordable, requires less maintenance, or better serves their physical needs with features such as handrails, wider doors, or a single-story floor plan.
Frequently Asked Questions
Does my home qualify? Eligible properties include single-family homes, 2-4 unit properties, manufactured homes (built after June 1976), condominiums, and townhouses. Co-ops do not qualify.
How much money can I get? The amount of fund you are eligible depends on several factors, including, but not limited to: the appraised current value of your home, your age, current interest rates, and any applicable upfront costs. Limits may exist.
Are there any special requirements? You must be 62 years of age or older. You must also meet certain financial requirements in order to ensure you have the financial capacity to continue paying mandatory obligations as stipulated in the Loan Agreement.
All borrowers and non-borrowing spouses must also receive independent counseling. Family members and trusted advisers are encouraged to attend. A loan officer can provide you with a list of approved counselors.
How can I use the proceeds? There are no restrictions on what the proceeds from a reverse mortgage can be used for. You can set up a “rainy day” fund, supplement retirement income to cover daily expenses, repair or modify your home, pay for health care, pay off existing debt, cover property taxes, make a major purchase, cover in-home care, or go on your dream vacation.