What's a reverse mortgage and how does it work?
A reverse mortgage is a loan designed to help you tap into the equity in your home. It's called a reverse mortgage because unlike a forward mortgage, where you make payments, a reverse mortgage pays you. In fact, one of the greatest benefits is that you do not have to make loan payments for as long as you live in your home. With a reverse mortgage, you can turn the value of your home into cash without having to move or to repay a loan each month.
Reverse mortgages typically require no repayment for as long as you -- or any co-owner(s) -- live in your home. So they differ from other home loans in these important ways:
- You don't need any income to qualify for a reverse mortgage
- You don't have to make monthly repayments on a reverse mortgage
- You can receive additional monthly income
- You are fully insured and protected against owing more than your home value
- You can never lose your home as long as you maintain the property and pay the property taxes
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The reverse mortgage industry is undergoing rapid and positive change. With the first wave of baby boomers set to turn 62 in 2008 and the personal savings rate at an all-time low, additional options to fund retirement plans are an obvious need. Here is the latest reverse mortgage program:
The jumbo reverse mortgage loan is designed for borrowers with home values greater than $350,000. This loan program allows borrowers with higher home values to access significantly more home equity than is available under the FHA HECM program. Some jumbo loans now feature low or no origination fees.
The loans are safe and secure because they are insured by the federal government through HUD/FHA. Additionally you continue to own and maintain full control over your home. With a reverse mortgage, your home title remains with you.
To qualify, there are only a few requirements:
- You, and any other owners of your home, must be aged 62 or over, live in your home as a principal residence, and not be delinquent on any federal debt.
- You must be a homeowner and have enough equity to qualify for the program.
- Your home must be a single-family residence in a 1- to 4-unit dwelling, or part of a planned unit development (PUD) or a HUD-approved condominium; some manufactured housing is eligible, but cooperatives and many mobile homes are not.
- Your home must meet HUD's minimum property standards, but you can use the HECM to pay for repairs that may be required.
- You must discuss the program with a counselor from a HUD-approved counseling agency.
Reverse Mortgage Benefits
Thousands of people each month improve their lives by taking advantage of a reverse mortgage to increase their monthly income.
- Eliminate debt - pay off mortgages or credit cards
- Ease worries by having extra cash available to spend each month
- Access extra cash to renovate or remodel your home
- Create that dream kitchen or bathroom (or both) you've always wanted
- Have extra money to travel
The Easy 9-Step Process
At Liberty Reverse Mortgage, we make obtaining a reverse mortgage easy for you by streamlining the process and being flexible - you never have to leave your home at any time. Click here to view our easy 9-Step Process.
We want you to be well-informed without feeling overwhelmed. That's why your Advisor and Processor will handle all the details from start to finish. But if you have any questions at any time, they will be glad to answer them for you.
