If you are 62 and older and you are looking to access the equity you have built in your home, consider a Reverse Mortgage. They are primarily designed to strengthen seniors’ personal and financial independence by providing funds without a monthly payment burden during their lifetime in the home.
A reverse mortgage is for seniors ages 62 and older who wish to supplement their income with home equity from their primary residence. In a reverse mortgage scenario, the borrower receives money from the lender either in a lump sum, through monthly payments, as a line of credit, or a combination of the three. The borrower may be currently delinquent on their mortgage as long as they have not been foreclosed upon. No credit or income checks are required.
You can use a reverse mortgage to supplement your retirement income, buy a new car, make home repairs, travel, help pay for a grandchild’s education, cover medical expenses, and more.
The HECM (Home Equity Conversion Mortgage) lets you choose among several payment options. You can select: 1) “term” option which means fixed monthly cash advances for a specific time 2) “tenure” option which means fixed monthly cash advances for as long as you live in your home 3) a line of credit that lets you draw down the loan proceeds at any time in amounts you choose until you have used up the line of credit and 4) a combination of monthly payments and a line of credit.
If you pass away the loan is repaid to the lender through the sale or refinancing of your home by your heirs. Any proceeds in excess of the amount owed to the lender belong to your heirs. You pay for the funds you used plus interest.
You must be at least 62 years of age and own and occupy your home. You must be willing and able to pay your real estate taxes and Homeowner’s Insurance in a timely manner. You will also be required to attend HECM counseling so that you completely understand the program prior to obtaining the loan. You may find a HECM counselor by calling 1-800-567-4287.