What is a Reverse Mortgage and is it Right for You?
Reverse Mortgages, sometimes called Home Equity Conversion Mortgages (HECMs), have helped thousands of seniors maintain their independence. This type of mortgage allows homeowners age 62 or older to use the equity in their homes for repairs, to pay down debt, or make large purchases—all with the option of no monthly mortgage payment.
How does a Reverse Mortgage work?
Whether you own your home outright or have paid off a significant portion of your mortgage, you can borrow from the equity in your home with a reverse mortgage. This type of loan is very similar to a traditional Home Equity Line of Credit (HELOC) or Home Equity Loan (sometimes called a second mortgage), but with more flexible repayment options. Each month, you can choose to pay interest only, principal and interest, or nothing at all. (Just keep in mind that, by not paying down the principal of the loan, you’ll have fewer assets to leave to heirs.) You’re only required to keep current with homeowners association fees, property taxes, insurance, and maintenance. This can free up a significant portion of your retirement savings or government benefits, allowing you to maintain or regain financial independence!
Do I qualify for a Reverse Mortgage?
According to the U.S. Department of Housing and Urban Development (HUD), to qualify for a Reverse Mortgage, you must:
- Be at least 62 years old
- Have paid down a significant portion of your mortgage or own your home outright
- Use the home as your primary residence
- Be current on any federal debts
- Have the means to pay property taxes, homeowners association fees, and insurance premiums
- Receive HECM counseling from an FHA-approved lender, such as MIDFLORIDA Credit Union
- Have a history of making timely payment of insurance premiums and property taxes
- Have the means to pay your living expenses
How can I learn more?
If you’re ready to apply for a Reverse Mortgage or would like more information, please schedule a consultation with one of our friendly mortgage professionals!