Use your home to stay in your home!
What is a Reverse Mortgage?
A Reverse Mortgage is a loan that enables senior homeowners to convert part of their home’s equity into tax-free income.
How do I qualify?
You do have to:
- be a homeowner 62 or older
- be living in the home as your primary residence,
- have equity in your home.
You don’t have to:
- be debt-free,
- own your home free-and-clear,
- sell your home,
- give up title,
- make monthly mortgage payments,
- have a qualifying income level,
- have a qualifying credit score.
Sounds too good to be true. How is this possible?
Your home’s appraised value, and the amount of built-up equity you have in it, is used as collateral for a Reverse Mortgage loan. That makes it a low-risk loan for the lender, and explains why qualifying is so easy for the borrower. In a sense, you’re reversing the flow of money that you’ve been investing in your house all these years, hence the name Reverse Mortgage.
How much does a Reverse Mortgage cost?
Many of the same costs associated with a regular mortgage apply to Reverse Mortgages. In most cases these costs are capped and may be financed as part of the loan, so that you incur little out-of-pocket expense. Remember though, that you still will have monthly property tax and mortgage insurance payments to make, which have nothing to do with your Reverse Mortgage loan.
How much money can I get?
The amount you can borrow depends on your age, the current interest rate and the appraised value of your home. Generally, the more valuable your home, the older you are, and the lower the interest rate, the more you can borrow.