Reverse Mortgages

Put it in Reverse…

A Reverse mortgage is a financial tool that can be used by homeowners 62 and older. It allows qualifying Borrowers the ability to stay in their homes, get rid of their mortgage payment, and gain access to their equity. The best part is that they can do all of this TAX FREE.

Unlike a traditional mortgage, in which you make payments to the lender each month, the Reverse mortgage utilizes the equity in your home so that payments are made TO YOU. You can receive this equity in the form of:

• Monthly Payments
• One Lump Sum
• As a Line of Credit
• A combo of the above mentioned options

The Reverse mortgage gives you access to the equity in your home when you need it, and on the terms you choose (payments, one lump sum, line of credit, etc, etc).

How Does a Reverse Mortgage Work?

In a Reverse Mortgage you make no payments and all interest is added to the lien on the property. Since reverse mortgages don’t require monthly payments, the mortgage amount you owe grows larger over time.

For example, if you get monthly payments than your balance would go up by the amount of these payments each month plus interest accrued. If you had a lump sum distribution the balance would go up by the lump sum amount plus interest accrued. The amount owed at the conclusion of a reverse mortgage (when you no longer occupy the home) is either the home’s value or the mortgage balance (whichever is the lesser of the two amounts).

As your home continues to appreciate you may find yourself in a position to take out an additional Reverse Mortgage to gain access to the newly acquired equity. It’s your equity and the Reverse Mortgage is just giving you access to it.

The Simple Truth

A Reverse Mortgage can be a fantastic tool for gaining access to that hard earned equity you’ve built up in your home. The money can be used for retirement, vacationing, medical expenses, repairs, or any other reason you deem necessary. It’s important to get all the information about your specific situation to ensure that the Reverse Mortgage is the right option for you.