Reverse MortgageFor many, a reverse mortgage can be a useful financial resource for homeowners 62 years and older to purchase a new home, pay off an existing mortgage, create a cash reserve, or be used as a supplemental income for retirement.
What you need to know about reverse mortgagesAn FHA Reverse Mortgage, also known as a Home Equity Conversion Mortgage (HECM)1, is regulated by the U.S. Department of Housing and Urban Development (HUD) and insured by FHA2. They can allow homeowners age 62 years and older to take out some of their home equity to improve their monthly cash flow. While no monthly payments are required, the borrower is required to keep any HOA payment, hazard insurance coverage, and property taxes current. They also must keep the home in good condition. Failure to do so will place the loan in default and the lender may be able to foreclose under the terms of the loan.
Connect with our Reverse Mortgage Specialist, Karin Fischer, to discuss the options by visiting her website here.
A Reverse Mortgage can be used as part of your financial retirement plan.With newer loan options that reduce up-front costs, reverse mortgages have become more versatile in recent years. Many homeowners are now using a Reverse Mortgage strategically as part of a sound financial plan. For example, a reverse mortgage line of credit can serve as a cash reserve that you can tap into as needed. And unlike a traditional Home Equity Line of Credit, the unused reverse mortgage credit line actually grows over time*. In fact, you can use this as a line of credit that increases, tax free3.
*If part of your loan is held in a line of credit upon which you may draw, then the unused portion of the line of credit will grow in size each month. The growth rate is equal to the sum of the interest rate plus the annual mortgage insurance premium rate being charged on your loan.
Monthly advances can also help you supplement other retirement income, so you can avoid withdrawing savings or liquidating invested assets. While you must continue to meet loan obligations such as taxes and insurance, no monthly mortgage payments are required, which can improve your cash flow and help you live more comfortably. Read more about Reverse Mortgages here.
Do you lose ownership of your home?A Reverse Mortgage does not require you to give up ownership of your home. As the borrower, your name remains on the title and the home is still yours—just as it would be with any mortgage. You must continue to meet your loan obligations, keeping current with property taxes, insurance, and keeping your home in good condition.
Trusted sources and clear informationYou are required to receive Reverse Mortgage counseling from a third-party counselor before application. With most financial products, there are a number of factors to consider before you can choose what’s best for you. Your experienced and committed Certainty team is here to guide you through the decision on whether a reverse mortgage is right for you. Contact us today to get started.
1 This material has not been reviewed, approved, or issued by HUD, FHA or any government agency. Certainty Home Lending is not affiliated with or acting on behalf of or at the direction of HUD, FHA, or any other government agency. To find a Reverse Mortgage counselor near you, search the HECM Counselor Roster at https://entp.hud.gov/idapp/html/hecm_agency_look.cfm or call (800) 569-4287.
2 Certainty Home Lending is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the Federal government.
3 Certainty Home Lending does not offer credit repair services.
Purchase or refinance an owner-occupied home
Consolidate debt to provide a more comfortable retirement
Renovate your home to help you age-in-place more comfortably
Help pay for in-home care or move closer to family and friends