Reverse Mortgages

What is a Reverse Mortgage?

A reverse mortgage is home loan that helps homeowners, typically 62+, convert a portion of their home equity into liquidity.  Funds can be used for almost anything, making it a very versatile and savvy retirement funding tool.

Do I have to own my home free and clear?

Not at all!  How much you can access depends on a couple factors including the borrowers age at application, current interest rates and the value of the home, but a reverse mortgage can be used to payoff an existing forward mortgage and possibly still get access to cash from your home's equity in the form of a lump sum, monthly payments or as a line of credit.  

If I get a reverse mortgage, does the bank own my home?  

No, the bank has a lien on the home, just as they would with a forward mortgage, and the home stays in your name and can still go to your heirs.

Will my heirs be stuck with debt if my home has lost value after I am gone?  

No because reverse mortgages are non-recourse loans, which means that when the house is sold, the loan gets paid off and if the sale price/market value is less that what is owed, then the lender accepts the payoff at closing as paid in full and any remaining balance is canceled.  

Will a reverse mortgage eliminate ALL of my monthly home payments?

While a reverse mortgage will eliminate your principal and interest payments on your primary home, a homeowner is still responsible to pay property taxes, homeowner's insurance and POA fees in a timely manner.  The home must also be maintained and kept in good condition as part of the loan agreement.

What if I have a great first mortgage rate and am comfortable with the current payment. Can I still get cash from my home without giving up that first mortgage?

Yes, we can do a reverse second mortgage loan that will have no effect on your existing first mortgage loan or payment.  This would allow a borrower to access additional equity in their home, without an additional monthly payment.

Can I purchase my new home with a reverse mortgage?

Yes, reverse mortgages can also be used to purchase a primary home and can even be used as a tool to get you more buying power for a higher priced home.