A Reverse Mortgage May be the Right Decision for Your Future
"Helping you Build a Better Life!"
A Reverse Mortgage May be the Right Decision for Your Future
"Helping you Build a Better Life!"
A Reverse Mortgage May Be the Right Decision for Your Future
If you are retiring soon, or even already started the process, take a moment to envision your life in retirement. Even if you planned, saved, and invested carefully for this time in your life, you may have fewer funds than you anticipated.
Now is the time to consider all your financial options to make the right decision for your future. A Home Equity Conversion Mortgage (or a “HECM” or “Reverse Mortgage”) may be the right decision for you.
A HECM, or reverse mortgage, is a Federal Housing Administration (FHA) insured loan that enables you to access a portion of your home’s equity. If you are 62 years of age or older and have sufficient home equity, you may be able to get the cash you need to:
- Pay off your existing mortgage
- Pay off medical bills, vehicle loans, or other debts to Improve your monthly cash flow
- Build a rainy day fund for unplanned expenses
- Take a family vacation
- Fund Investments
- Fund necessary home repairs or renovations
Key Benefits for a HECM Loan:
- Eliminates your existing monthly mortgage, principal, and interest, payments
- You can stay in your home and maintain the title as long as loan obligations are met
- Heirs inherit any remaining equity after paying off the HECM loan
- The HECM loan is FHA insured
- The loan only becomes due when: Sell, death, refi
To be eligible for a HECM loan, some key requirements are:
- The youngest borrower must be at least 62 years of age
- You must live in your home as your primary residence and have sufficient equity
- You cannot be delinquent on any federal debt
- Property must be a single-family residence, an owner-occupied 2-4 unit home, a condominium approved by the Department of Housing and Urban Development (HUD), or a manufactured home that meets FHA guidelines
- Must meet financial assessment requirements as established by HUD
- You are responsible for taxes and insurance payments
- With a fixed-rate HECM loan, you can receive cash in a lump sum. With an adjustable-rate HECM loan, you can select:
- Tenure: Equal monthly payments.
- Term: Equal monthly payments for a fixed period of months selected by the borrower.
- Line of Credit: Draw at any time and in any amount of your choosing until the line of credit is exhausted. Modified Tenure: Combination of line of credit plus scheduled monthly payments.
- Modified Term: Combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.
The amount that can be disbursed at closing (fixed- and adjustable rate) and during the first 12 months (adjustable rate only) is limited to the greater of 60% of the principal limit amount or the sum of mandatory obligations plus 10% of the principal limit. Consult Debbie Resch to learn more!
A HECM Loan Has Built-in Safeguards That Protect You
FHA Mortgage Insurance - on all HECM Mortgage
HECM loans are FHA insured. You are always protected against lender insolvency and will continue to have access to your available equity as long as all loan obligations are met. One of the requirements for FHA insurance is that the borrower is charged an up-front mortgage insurance premium (MIP) fee at closing and, over the life of the loan, is charged an annual MIP fee on the loan balance. This insurance protects the borrower and their heirs in the event the loan balance is higher than the home’s value when the loan becomes due and payable. They are not responsible for any loan balance that is not covered by the disposition of the property.
In fact, currently, any family heir can purchase the home from the estate for a maximum of 95% of the current appraised value.
Independent Counseling
Independent counselors which are approved by HUD provide you with objective information and help you understand the process and decide if an RM is right for you.
Capped Interest Rates
If your loan has an adjustable interest rate, there is a limit on how much the interest rate can change each time it adjusts, as well as over the life of the loan.
No Prepayment Penalty
The HECM loan can be repaid at any time in part or in full, without penalty.
Eligible Non-Borrowing Spouse Protection
Upon passing of the last remaining borrower, an eligible non-borrowing spouse may be able to have the repayment of the reverse mortgage deferred if certain requirements are met.
Copyright © 2023 Debbie Resch Reverse Mortgage - All Rights Reserved.
© 2023 Premier Mortgage Resources, LLC (“PMR”) | NMLS #1169 www.nmlsconsumeraccess.org | 3363 Presidential Dr. #200, Meridian, ID 83642
Equal Housing Opportunity | Licensed by the Department of Financial Protection and Innovation, under the California Residential Mortgage Lending Act.
Not an offer to extend credit or a commitment to lend. Terms are subject to change without notice. This material is not provided by, nor approved by, the Department of Housing & Urban Development (HUD), the Federal Housing Administration (FHA), or any Government agency. While there are no monthly principal and interest mortgage payments with a reverse mortgage, the borrower remains responsible for taxes, insurance, and property maintenance. Monthly payments or disbursements from the lender are not considered income and therefore, not tax deductible. Other conditions may apply.