Reverse Mortgages

Reverse Mortgages are designed for homeowners age 62 and over that allow them to withdrawal the equity in the home for any purpose. A reverse mortgage also allows them to stay in their home while receiving payments and not have to make any monthly mortgage payments on those payments received.

To qualify for a reverse mortgage both you and any co-borrower must be at least 62 and the home must be your primary residence. There are no income restrictions or credit restrictions to qualify. The home also doesn’t have to by paid off to qualify. Though loan amounts are capped based on the loan type and the county you live in.

Closing Costs on a reverse mortgage can be as much as closing costs on a conventional first mortgage. There are also fees to service the loan and Federal Housing Administration (FHA) insurance that has to be paid. Closing costs can be rolled into the loan keeping out of pocket expenses low. Though rolling the costs into the loan will also lower the amount you can take out and the monthly amount you will receive if you elect a monthly payment method.

You can receive your payments in monthly installments for a fixed number of years. You can receive a lump sum payment. You can also use the reverse mortgage as a line of credit and withdrawal funds when you need them.

A reverse mortgage is repaid when you permanently leave the home or when you sell the home. If you pass on, your relatives (estate) have the choice of repaying or refinancing the loan with a conventional mortgage or selling the home and using the funds to payoff the reverse mortgage.