Reverse Mortgage Loan Programs

Type of loan available to seniors over 62 years old, using the equity in their homes to provide tax-free income.

Reverse Mortgage Loan Highlights

• Age requirement: To be eligible for a reverse mortgage, the borrower must be at least 62 years old.
• No monthly payments: Reverse mortgages do not require the borrower to make monthly payments, allowing seniors to access the equity in their home without affecting their cash flow.
• Loan amount: The loan amount available through a reverse mortgage is based on the value of the home, the age of the youngest borrower, and current interest rates.
• Loan disbursement options: Reverse mortgages can be disbursed as a lump sum, a line of credit, or in monthly payments, allowing the borrower to choose the best option for their financial situation and goals.
• No credit score requirement: Reverse mortgages do not have a credit score requirement, making them accessible to seniors regardless of their credit history.
• Homeownership: The borrower retains ownership of their home, and the loan does not have to be repaid until the borrower dies, sells the home, or no longer lives in the home as their primary residence.
• Fees: Reverse mortgages typically have higher fees compared to traditional mortgages, including an origination fee, mortgage insurance premium, and closing costs.

For borrowers 62 and older a reverse mortgage can be a great option for a refinance or home purchase. The FHA backed HECM program allows qualified borrowers to withdraw a portion of their equity tax free without having to make mortgage payments for the remainder of their life or until they leave/sell the home. Borrowers still must maintain home insurance and pay property taxes but can omit monthly mortgage payments from their budget, freeing up much needed cash flow for fixed income borrowers. 
Apply below to get started by learning more about your reverse mortgage loan options.

REVERSE MORTGAGE BENEFITS

• Can be In Forbearance
• Can Have Credit Events
• Can Be Used to Stop Foreclosure Process
• Frees Up Monthly Cash Flow
• Tax Free Cash Out Refinance

Reverse mortgages are a type of loan that allow homeowners to borrow money using the equity in their homes as collateral. Unlike a traditional mortgage, where the borrower makes monthly payments to the lender, with a reverse mortgage the lender makes payments to the borrower. Reverse mortgages can be a useful financial tool for senior homeowners who want to tap into the equity in their homes but do not want to sell the property or take on additional monthly payments.

How does a reverse mortgage work?
To qualify for a reverse mortgage, the borrower must be at least 62 years old and must own the property outright or have a low mortgage balance that can be paid off with the proceeds of the reverse mortgage. The borrower must also occupy the property as their primary residence.
The amount of money that the borrower can receive from a reverse mortgage is based on several factors, including the value of the property, the age of the borrower (or the age of the youngest borrower if there is more than one), and the current interest rate. The lender will provide the borrower with a list of options for receiving the funds, which may include a lump sum, a line of credit, or a combination of the two.

One of the biggest advantages of a reverse mortgage is that the borrower does not have to make monthly payments to the lender. Instead, the loan is repaid when the borrower sells the property or passes away. If the borrower sells the property, the lender will receive the proceeds of the sale, up to the amount of the loan, and any remaining equity will be returned to the borrower or their heirs. If the borrower passes away, the lender will receive the proceeds of the sale, and any remaining equity will go to the borrower's heirs.

Benefits of a reverse mortgage
There are several potential benefits to taking out a reverse mortgage, including:

• Access to cash: A reverse mortgage can provide a source of cash for seniors who need financial assistance but do not want to sell their homes.
• No monthly payments: As mentioned above, one of the biggest advantages of a reverse mortgage is that the borrower does not have to make monthly payments to the lender. This can be a relief for seniors who are on a fixed income and are struggling to make ends meet.
• No credit or income requirements: Reverse mortgages do not have the same credit or income requirements as traditional mortgages, which means that they may be an option for seniors who do not qualify for other types of loans.
• The ability to stay in the home: Because the borrower does not have to make monthly payments on a reverse mortgage, they can stay in their home for as long as they want. This can be especially beneficial for seniors who want to age in place.
• Tax-free income: The money that the borrower receives from a reverse mortgage is not considered taxable income, which means that it will not affect their taxes or entitlements.
• Drawbacks of a reverse mortgage
• There are also some potential drawbacks to taking out a reverse mortgage, including:
• Upfront costs: Reverse mortgages often come with significant upfront costs, including origination fees, closing costs, and mortgage insurance premiums. These costs can be steep, especially for borrowers who are only taking out a small loan.
• Decreasing equity: Because the borrower is receiving money from the lender, the equity in their home will decrease over time. This can be a problem if the borrower needs to sell the property or if the borrower's heirs want to keep the property after the borrower passes away.
• Complexity: Reverse mortgages can be complex and may be difficult for some seniors to understand. It is important for borrowers to fully understand the terms of the loan and the potential risks before they agree to take out a reverse mortgage.
• Loss of government benefits: Depending on the amount of money that the borrower receives from a reverse mortgage, it may affect their eligibility for certain government benefits, such as Medicaid. Borrowers should be aware of this potential risk and discuss it with their financial planner or a benefits counselor before taking out a reverse mortgage.
• Changes in the value of the property: If the value of the borrower's property decreases significantly, it could result in the borrower owing more on the reverse mortgage than the property is worth. This is known as being "underwater" on the loan, and it can be a problem if the borrower needs to sell the property or if the borrower's heirs want to keep the property after the borrower passes away.
• Interest accrual: Although the borrower does not have to make monthly payments on a reverse mortgage, interest is still accruing on the loan. This means that the total amount owed on the loan will increase over time.

Who should consider a reverse mortgage? 
A reverse mortgage may be a good option for seniors who meet the following criteria:

• They are at least 62 years old and own their own home.
• They have a low mortgage balance that can be paid off with the proceeds of the reverse mortgage.
• They want to tap into the equity in their home but do not want to sell the property or take on additional monthly payments.
• They are comfortable with the potential risks and drawbacks of a reverse mortgage.
• It is important for seniors to carefully consider their options before taking out a reverse mortgage. They should discuss their financial situation with a financial planner or a reverse mortgage counselor to determine if a reverse mortgage is the right choice for them. They should also compare offers from multiple lenders to ensure that they are getting the best deal.

Conclusion
Reverse mortgages can be a useful financial tool for seniors who want to tap into the equity in their homes but do not want to sell the property or take on additional monthly payments. While reverse mortgages have the potential to provide seniors with a source of cash and the ability to stay in their homes, they also come with risks and drawbacks that should be carefully considered. Seniors should discuss their financial situation with a financial planner or a reverse mortgage counselor and compare offers from multiple lenders before taking out a reverse mortgage.