When people understand the power and impact a reverse mortgage can have, they have two reactions.
- This is too good to be true and
- Why doesn’t everyone do this?
Understanding your options is key to financial freedom!
3 Ways to Use a Reverse Mortgage
In a nutshell, these are the 3 ways a reverse mortgage is used:
- Eliminate a mandatory monthly mortgage payment
- Access home equity via a lump sum, monthly installments or a line of credit that earns compound interest, guaranteed and is protected from any real estate market correction
- Home purchase, where a senior 62 years or better puts down 50-60% and doesn’t have a mandatory, monthly mortgage payment
As I meet with clients, they are pleasantly surprised to learn that a reverse mortgage is a non-recourse loan. What that means is responsibility for repayment shifts from the borrower to the home. Essentially, the house owes the money, not a person.
Reverse mortgages are one of the best-kept secrets for senior homeowners. It really is a game-changer for finances in retirement.
The types of properties that are eligible for a reverse mortgage are:
- Single Family homes,
- patio homes,
- condominiums and
- 2-4 unit properties, as long as the borrower lives there 6 months a year as their primary residence.
What responsibilities does the borrower have?
- Pay the property taxes
- Pay the homeowners insurance
- Pay any other fees related to the property such as HOA, flood insurance, etc.
- Maintain the property
Finally, the borrower remains on title and the term of the loan goes to age 150 of the youngest borrower. To learn more, reach out so we can visit by phone, 833-693-7848. It is free to find out if you qualify.