1. What is a Reverse Mortgage?”

A reverse mortgage is a loan designed specifically for  homeowners,  age 62 and older. You’re able to convert a portion of your home  equity to pay off your existing mortgage if you have one, create tax-free* cash, pay bills and increase cash flow. You stay in your home,  keep ownership and makes absolutely no payments until you permanently  move from your home.

2. How do I qualify for a reverse mortgage?”

You must be at least 62 years old and have enough equity in your home to pay off any existing mortgage. You also must demonstrate willingness and capability to pay your property charges such as property taxes and homeowner’s insurance. Don’t worry, I’ll guide you thru the process.

3. Why should I get a reverse mortgage instead of an equity line of credit?

Both a reverse mortgage and a home equity line of credit (HELOC) can be used to convert equity into cash. With the HELOC you still have to make monthly payments and it eventually it will reset so you have to make interest and principle payments.

Reverse mortgage line of credits cannot be capped, reduced, frozen or eliminated because of property values or changes to the market. And,,,, your reverse mortgage line of credit grows at the same rate as your loan rate + 1.25%. Many financial planners are recommending that their clients set up reverse mortgages sooner than later to take advantage of this growth feature.

4. How much money can I get?

Your reverse mortgage proceeds will depend upon your age, which program you choose, current interest rates and the value of your home. Generally the older you are the more money you receive.

5. What kind of reverse mortgage programs are available?”

Jumbo Reverse Mortgages & FHA Home Equity Conversion Mortgage Reverse (HECM) mortgages are growing in popularity. However, not all reverse mortgages will fit your needs. Each plan has it’s unique components. I’ll help you do the research and provide you with the complete picture.

6. What are the interest rates on a reverse mortgage?

For the FHA HECM loan, the interest rate is based on the 1 month LIBOR index or published fixed rates.  A majority of reverse mortgage products have variable rates. There are a few that are fixed. The fixed rate reverse mortgages are usually attractive for borrowers who want a lump sum or have a larger mortgage to pay off. Call me, I’ll help you with the details and show you what to look for.

7. How can I receive my money?”

Reverse mortgage payment options have great flexibility and are designed to meet your individual needs.

  • You can receive a lump sum all at once.
  • You can receive equal monthly payments as long as you live in your home.
  • You can receive your money in equal amounts for a specified amount of time.
  • You can set up a line of credit; which you can draw on as needed.
  • You can also choose a combination of line of credit with monthly payments and cash at closing. It’s up to you!

8. How can I use my reverse mortgage proceeds?

You can use the money for anything. It can be used to enhance your present retirement income, pay off debt, make home repairs, pay off an existing mortgage or travel. There are no limits, it is your money.

9. Does the bank take my home when I die?”

No, Your loan becomes due only when you permanently move from your home, sell it or pass away. At that time your heirs will have the choice of refinancing, paying off the reverse mortgage and keeping the home. Or, selling the home and paying off the reverse mortgage and keeping any the equity left over from the sale. Your reverse mortgage is only tied to your home and may not be tied to any other asset you have.

10. How much does it cost to get a reverse mortgage?

The costs to attain a reverse mortgage are similar to attaining a conventional loan, the fees include origination, title and appraisal among other typical fees. There are NO hidden fees or costs associated with reverse mortgages. All fees are divulged.

11. Are the proceeds of a reverse mortgage taxable?

No, your proceeds are not taxable*. You are still responsible to pay for property taxes and homeowners insurance.
*Please consult your tax expert.

12. How does the reverse mortgage proceeds affect my Social Security and Medicare?

if you receive need based benefits such as SSI or Medicaid it is advisable to consult with your benefits consultant. You can attain a reverse mortgage and structure the receipt of your proceeds so your benefits are unaffected*.

The interest on your reverse mortgage is deductible when the interest is paid on the loan (at its completion).**

*Consult your benefits  expert.  **Consult your tax expert.

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