Reverse Mortgage Loans

Today’s reverse mortgage loans are cheaper than ever before, and I am proud to say that reverse mortgage loans are one of our areas of specialty.

Here’s some info you probably didn’t know about reverse mortgages, and how they are now an impressive tool that can be used to help our aging population with rising inflation.

It wasn’t long ago that the reverse mortgage was rightfully known as a tool used by banks to steal your house! Unlike a regular mortgage that requires a minimum monthly payment, a reverse mortgage allows you to make a payment if you want, but if you don’t, your balance goes up instead of going down. Designed for homeowners age 62 and older, this program rightly got a bad rap due to high loan amounts and lender practices that could leave people homeless.

So, what’s changed?

Well for starters, the equity in the home is still yours, not the banks, and you and your spouse can live in the home without ever making a payment. Your only responsibility is to pay the taxes and insurance. If one of you passes away, or can’t for some reason stay in the home, the surviving spouse will still be able to live in the home. The equity in the home is still yours, even if you decide to sell the home later. Loan amounts have been lowered to preserve equity for the future. Now it is less likely you will ever owe more than your home is worth. When all borrowers pass away, the loan must be refinanced, or the home must be sold. Any remaining equity will go to your estate, not the bank!

What’s better than a credit card?

A credit line with an expected rate of less than 5% that can grow over time, with no payments due! Most reverse mortgages will allow the borrower to draw from this credit line for any reason. While that long-needed trip to the Bahamas may come to mind, many savvy financial advisors are using this as an additional source to pay for long-term care and rising medical costs.
If you don’t use the credit line it will grow as you get older. A $35,000 credit line left untouched at age 62 can easily grow to $70,000 overtime. Most of the time, a reverse mortgage is a better alternative to making a regular mortgage payment because you can keep retirement funds for a rainy day. Having options available without monthly payments gives people the ability to leave investments that are performing well intact, and avoid unnecessary taxes.

 

Reverse Mortgage Assistant

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  • ** Not tax advice, consult a tax professional.

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Here are some frequently asked questions (and answers) about reverse mortgage loans

 

Q1: Can I still make my mortgage payments if I want to?
A1: YES

 

Q2: Do I have to make my mortgage payments?
A2: No, you are only required to pay the property tax and insurance.

 

Q3: What happens if I continue to make my payments?
A3: Your mortgage balance continues to go down, just like with your current mortgage.

 

Q4: What happens if I choose to not make payments?
A4: Your balance goes up and the equity in your home decreases over time.

 

Q5: Can I buy a house with a reverse mortgage loan?
A5: YES

 

Q6: Should I do a reverse mortgage loan on my home?
A6: The reasons are different for every individuals. More than anything, we want you and your family to make the best decision, even if that means retaining your current mortgage.

 

Q7: How can I find out if a reverse mortgage loan is right for me?
A7: We provide free assessments for home owners who are interested in having their questions answered about reverse mortgage loans. We will run custom numbers for your mortgage situation for free and with no obligation to you and/or help you schedule an appointment with a Reverse Mortgage Loan Counselor. Our goal is to assess the best option for you and your family.

 

Q8: Are the proceeds of the loan subject to taxes?
A7: No, the proceeds from a reverse mortgage loan are tax-free.

 

This material is not from HUD or FHA and has not been approved by HUD or a government agency.