While we take pride in our role as a financial facilitator for clients interested in a reverse mortgage, we realize that a reverse mortgage is not for everyone. We strive to accomplish everyone’s goals by working with the trusted financial and legal advisors representing our clients. Together we will determine whether a reverse mortgage will meet the needs of our clients.
We make it our business to be transparent in regard to the advantages and disadvantages of a reverse mortgage. With your client’s permission, we are happy to provide pertinent loan scenarios and personal consultations in an effort to arrive at a loan decision that is in the best interest of your client.
REVERSE MORTGAGE ADVANTAGES
- Could eliminate their monthly mortgage payment while providing beneficial access to their home equity (Borrowers are responsible for property taxes, mortgage insurance and reasonable maintenance).
- Can be used to secure a borrower’s independence, while keeping them in their home.
- Typically, the proceeds from a reverse mortgage do not affect Social Security or Medicare.
- The loan is insured by the FHA.
- May allow seniors to make a new home purchase with no monthly principle and interest mortgage payments.
- Could provide a source of cash flow to the borrower while waiting for their investments to recover from a downturn.
- Can be used to provide for in-home senior care or to pay off other medical bills
- A reverse mortgage can be used to improve a senior’s standard of living while keeping them comfortable in their own home.
DISADVANAGES
- The borrower’s home equity is reduced over time.
- Reduces the property inheritance available to children and other heirs.
- In some cases, a reverse mortgage can affect eligibility for needs-based programs such as Medi-Cal.
GOALS OF THE REVERSE MORTGAGE BORROWER
These are some of the more typical reasons for a reverse mortgage, as cited by our many past clients:
- The borrower was living on a fixed or limited income and had substantial equity built up in their home.
- The borrower opted to access mortgage loan proceeds instead of other accounts or investments that carried with them a tax burden.
- The borrowers wanted to access their equity to stay in their home and grow old in a comfortable and familiar place.
- The reverse mortgage enabled the borrowers to maintain or improve their lifestyle.
As a responsible lender, Lineage Lending is eager to answer any questions and clear up any confusion pertaining to your client’s potential loan.
Together, we can work to improve the day-to-day lives of our clients.
