The Reverse Mortgage: The Basics
A Reverse Mortgage is a unique loan against the equity you have in your home that you do not have to pay back as long as you live there. With a Reverse Mortgage, you can turn the value of your home into cash without ever having to move or make monthly payments.
Whether seeking money to finance a home improvement, pay off a current mortgage, supplement retirement income or pay for healthcare expenses, many older Americans are turning to Reverse Mortgages. Reverse Mortgages can help owners who are equity-rich but cash-poor to stay in their homes and still meet their financial obligations. AARP revealed that 85% of seniors want to remain in their homes and a Reverse Mortgage can help make this possible.
The money you get from a Reverse Mortgage can be paid to you in several
ways:
- all at once, in a single lump sum
- in regular monthly payments
- “credit line” account that lets you decide when and how much is paid to you; or
- as a combination of these payment options
No matter how this loan is paid out to you, you do not have to pay anything back until the last surviving borrower passes away; you sell your home, or permanently move out of your home.
With other types of loans, the lender checks your income to see how much you can afford, but with a Reverse Mortgage there are no monthly payments. You do not need a minimum amount of income to qualify; however you must have equity in your home and you must be 62 years of age or older.
You may use the money from a Reverse Mortgage in any way you wish.
Sixty-seven percent (67%) of seniors have used the funds for hospital/health
care costs and fifty-five percent (55%) have used the funds to pay off
existing mortgages.
There are many choices for seniors when considering a Reverse Mortgage. At Jacob Dean Mortgage we have professionally trained Reverse Mortgage specialists who can provide you with a comprehensive computer generated analysis to determine what you may be qualified for. Loan proceeds available to the borrower are based on three main factors:
- The age of the homeowner(s)
- The value and location of the home
- The current interest rates
Reverse Mortgage loan proceeds are not taxable, and do not affect Social Security or Medicare benefits.