Is a Reverse Mortgage Right for You?
A reverse mortgage is a powerful financial tool designed for seniors age 62 and older that can enable you to capitalize on the years you’ve invested in your home. Imagine living in your home without a traditional mortgage payment or enjoying benefits of regular monthly loan proceeds. Your home remains yours, just as it was before, only now a portion of the accumulated equity in your home can be put to work for you. Many common questions regarding reverse mortgages are answered below, or better yet, give Lineage Lending a call and have all of your questions answered quickly, comprehensively and in plain language. After all, it’s your home, why not look further into what it can do to enhance and improve your lifestyle.
What is a Reverse Mortgage?
A reverse mortgage can be an excellent financial option for seniors with moderate or high equity built up in their homes and who are seeking extra cash and increased financial stability. Simply put, a reverse mortgage is a home loan that is designed to provide cash to homeowners, one of whom must be age 62 or older, using the equity built up in their homes. The loan amount depends upon the age of the youngest borrower and the value of the equity in the home. A reverse mortgage can only be obtained for the borrower’s primary residence. Borrowers are required to pay property taxes, insurance and keep their houses maintained. You retain ownership, and live in your home as long as you like.
Sometimes called a Home Equity Conversion Mortgage, or HECM, a reverse mortgage can generate a number of valuable benefits.
- Providing tax-free* money for any use
- Providing cash for home remodeling
- Increase monthly cash flow to pay bills and live comfortably
- Eliminate monthly mortgage payments
- Finance a dream vacation
- Help children buy their first home
- Help grandchildren attend college
All while living in and retaining ownership of your home.**
Reverse Mortgage Options
With a reverse mortgage there are different options
- Reverse Mortgage Payment of Loan Proceeds: You can receive loan money as a line of credit, monthly installment, a combination of these, or a lump sum.
- Reverse Mortgage Interest Rate: You can choose between a fixed interest rate and an adjustable interest rate. Fixed interest rates are only available with the lump sum payment option.
- Reverse Mortgage for Purchase: A Reverse Mortgage for Purchase allows you to purchase a home using money from a reverse mortgage loan.
- Reverse Mortgage Refinance: A Reverse Mortgage Refinance allows one reverse mortgage loan to be paid off by another reverse mortgage loan. This type of refinancing is typically used to borrow more cash, if the home value has gone up or to get a lower interest rate, if one is available.
A reverse mortgage is not a government grant, but a loan that is repaid in the future when the home is sold or the last borrower dies or permanently leaves their residence. As a protection, all homeowners seeking a reverse mortgage are required to obtain counseling (from an independent HUD-approved third party counselor) prior to incurring any costs associated with the loan. While proceeds from a reverse mortgage are not subject to personal income taxation, borrowers should seek advice on how proceeds may affect government needs-based programs such as Medicaid and Medi-Cal.
Reverse Mortgage Borrower Obligations
Through the life of the loan, the borrower is responsible for paying property taxes, mortgage insurance and maintaining the home. Failure to do so may result in the loan coming due.
Call Lineage Lending, and together, we can help you access the unused wealth that your status as a homeowner provides.
We have been the reverse mortgage experts for over a decade, and specialize in safely getting the maximum cash benefit for our clients. We would be happy to explain in detail how easily a reverse mortgage can provide you with extra cash, freedom from worry and a comfortable retirement.
*Please consult with your tax advisor.
**Homeowner is responsible for property taxes, insurance and maintenance.
