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Reverse Mortgage Basics<br />
By: Nick Flores / Loan Educator<br />
What Is a Reverse Mortgage? A reverse<br />
mortgage is a mortgage loan for<br />
homeowners 62 or older that enables them to<br />
access their home equity.<br />
This type of loan does not require a monthly mortgage payment.<br />
This benefits the borrower to continue to live in their home without<br />
this cost.<br />
<strong>The</strong> loan is repaid when either of the following occurs: borrower<br />
sells the home, finds another primary residence to live in, or passes<br />
away. <strong>The</strong> legal term for a reverse mortgage is Home Equity Conversion<br />
Mortgage (HECM).<br />
Could You Benefit from a Reverse Mortgage? Enjoy your retirement<br />
with this flexible solution, since a reverse mortgage lets you:<br />
1. Access to your property equity to do home improvements, take an<br />
extended vacation, reinvest or save for the future;<br />
2. Gain access to non-taxable cash without affecting your Social<br />
Security or Medicare eligibility;<br />
3. Live in your property without monthly payments and without<br />
losing the title to your home;<br />
4. Finance your loan with minimum out-of-pocket expenses;<br />
5. Choose your loan proceeds in the form of a lump sum, monthly<br />
installments, a line of credit, or opt to combine these forms;<br />
6. Reverse as a purchase loan: Buy a new primary property without<br />
a mortgage payment.<br />
Are You Qualified?<br />
Enjoy the benefits of<br />
a reverse mortgage in<br />
your golden years. <strong>The</strong><br />
requirements are as<br />
follows:<br />
1. <strong>The</strong> borrower<br />
needs to be 62 or older<br />
(spouses could be<br />
younger) and must be the titleholder of the equity.<br />
2. <strong>The</strong> borrower must be able to repay their current obligations, such<br />
as homeowners’ insurance and property taxes with no serious late<br />
payments within the past 24 months.<br />
3. All existing loans/liens must be paid off with reverse mortgage<br />
proceeds, or with some other funds during closing.<br />
4. Your home must be a single-family home, 1-4-unit home, a<br />
condominium, a planned unit development, or modular home. A<br />
manufactured home is in some cases eligible.<br />
5. <strong>The</strong> Federal Housing Administration wants you to understand<br />
the process and receive a certificate upon counseling completion with<br />
third-party counseling; then you can bring the certificate to the lender<br />
and start the process.<br />
Consult with your tax consultant for additional information. Find out<br />
if a reverse mortgage is right for you by attending our free educational<br />
seminar. Details are below.<br />
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