Simple and Easy.
Reverse Mortgages Stated Clearly.
Our goal is to help you maximize your retirement assets to the fullest while leaving a meaningful legacy your heirs can enjoy for generations upon generations.
What Exactly is A Reverse Mortgage?
Since their inception in 1988, Reverse Mortgage loans can turn your home’s equity into cash to help pay monthly living expenses during retirement. Also known as a HECM, or Home Equity Conversion Mortgage, enables a homeowner, age 62 or older, to access the equity in their home without having to sell the home, refinance or even give up the title.
The reverse mortgage is insured by the Federal Housing Administration or FHA and has helped thousands of homeowners safely access their equity. With a HECM Mortgage you:
To be eligible for a Reverse Mortgage:
- you must be 62or older ( age 55 is acceptable in some cases)
- the home must be your primary residence
- you must have enough equity to pay off existing liens
- the property must be a single-family home, condo, townhouse, or 2-4 unit owner-occupied home
- you must take a HUD-approved counseling course
- you must continue to pay property taxes and homeowners insurance
Many consumers ask, "Why would I want a Reverse Mortgage?"
The answer to that specifically will vary from retiree to retiree but the larger question is why wouldn't you? A reverse mortgage can do so much. It can protect, preserve and enhance just about anyone's retirement. It can give a larger legacy to your heirs or it can increase a retirees investable assets simply because they can be more aggressive while they have stand by line of credit with a reverse mortgage to fall back on.
How does a Reverse Line of Credit Work?
A reverse mortgage line of credit gives a retiree acess to more credit as the years go by. You will see by the chart below that a retiree who starts with $150,000 line of credit at age 62, would have around $300,000 by age 72. This "line of credit growth" has absolutely nothing to do with the value of a home. Matter of fact the home can decline in value while the line of credit increases in value! This could very well be of great use later in a retirees retirement. This is the biggest reason why we advocate to start a reverse as soon as you become of age, if not you lose all the credit line growth. In addition, your home could be worth much less later in retirement.
Feature Highlights of Utilizing a Reverse Mortgage
A Reverse Mortgage is known by its formal name as a HECM Mortgage. A HECM Mortgage is insured by the federal government, specifically the Federal Housing Administration or FHA, has been around since 1988 and has helped thousands of homeowners.
Yes! You can absolutely purchase a home with a reverse mortgage, utilizing what is called a HECM for Purchase.
In order to qualify for a Home Equity Conversion Mortgage, the homeowner must be 55 or older. The home must be your primary residence and meet HUD minimum property standards.
There are many different ways to access cash from your homes such as conventional cash-out refinance, a second mortgage, or a home equity line or loan. All these “conventional” ways require monthly repayments of principal and/or interest. With a Home Equity Conversion Mortgage, you do not need to make monthly mortgage payments as long as you remain in the home. The loan is only repaid if you leave the home.
There are no restrictions as to how you must use your proceeds from your reverse mortgage. Common uses range from monthly living expenses, healthcare, estate planning, or paying college costs for children or grandchildren.
There are a few risks with reverse mortgages. The biggest risk is to utilize a reverse mortgage out of the context of your financial plan. There should be a reason to do the mortgage. Whether its to fund long term care, or to have a stand by line of credit for emergencies or to fee up your mortgage payment to utilize elsewhere etc. Never take out a reverse mortgage because you can not afford your current payment.