What is a Reverse Mortgage?
What is a Reverse Mortgage? It is a loan that converts your home equity into a line of credit that can be used to increase your monthly income, or pay off unwanted debt. This is an adjustable-rate mortgage and the interest rate is calculated off the one year U.S. Treasury Security. Any adjustment in the rate does not affect the amount or number of loan advances you can receive, but causes the loan balance to increase at a faster or slower rate.
Who is eligible? Any homeowner 62 years of age or older and occupies the property as their primary residence. The property can be a single-family home, condominium, townhome, or 2 to 4 unit dwelling. The home needs to be either owned free and clear, or have a mortgage balance that can be paid off by the new loan.
What are the requirements to qualify? The loan process and requirements are fairly simple. No credit report is required and the borrower does not have to prove income, assets, or employment. No monthly payment is required on this type loan, so verification that the borrower being “credit worthy” is not a consideration.
What are the benefits? The monthly payment you receive is not considered “income” so it does not affect your Social Security, Medicare, SSI, or Medicaid benefits. Since the source of these payments are from a loan, they are tax-free.
A reverse mortgage is a “non-recourse” loan. This means if the value of your home ends up being less than the amount you borrowed, neither you nor your heirs will owe the bank any money. You will never owe more than the value of the house.
You can either receive the funds from the loan in one lump sum, or opt to receive a monthly income that will continue as long as you live in your home, or a combination of the two. Since this is a line of credit, you can withdraw money at any time for unexpected expenses, even if you choose the monthly income option.
You can continue to live in your own home as long as you want. Staying in your own neighborhood and near the friends you have cultivated is both a comfort and rewarding.
What are the costs associated with this loan? There are closing costs, but the majority of these fees, such as appraisal, title, attorney, and origination, can be financed into the loan. The out-of-pocket expense would be in the vicinity of $300.
The borrower is required to continue maintaining the property, paying the real estate taxes, and hazard insurance premium while the loan is in place.
How is the loan repaid? Repayment of your loan is not required until you sell your home, or have not used the home as your primary residence for more than 12 months. If you die, your heirs can either sell the home, or use other assets to pay off the loan balance.
Academy National Mortgage
Denise Wing, C.E.O.
Certified Mortgage Lender
303-987-0622
Who is eligible? Any homeowner 62 years of age or older and occupies the property as their primary residence. The property can be a single-family home, condominium, townhome, or 2 to 4 unit dwelling. The home needs to be either owned free and clear, or have a mortgage balance that can be paid off by the new loan.
What are the requirements to qualify? The loan process and requirements are fairly simple. No credit report is required and the borrower does not have to prove income, assets, or employment. No monthly payment is required on this type loan, so verification that the borrower being “credit worthy” is not a consideration.
What are the benefits? The monthly payment you receive is not considered “income” so it does not affect your Social Security, Medicare, SSI, or Medicaid benefits. Since the source of these payments are from a loan, they are tax-free.
A reverse mortgage is a “non-recourse” loan. This means if the value of your home ends up being less than the amount you borrowed, neither you nor your heirs will owe the bank any money. You will never owe more than the value of the house.
You can either receive the funds from the loan in one lump sum, or opt to receive a monthly income that will continue as long as you live in your home, or a combination of the two. Since this is a line of credit, you can withdraw money at any time for unexpected expenses, even if you choose the monthly income option.
You can continue to live in your own home as long as you want. Staying in your own neighborhood and near the friends you have cultivated is both a comfort and rewarding.
What are the costs associated with this loan? There are closing costs, but the majority of these fees, such as appraisal, title, attorney, and origination, can be financed into the loan. The out-of-pocket expense would be in the vicinity of $300.
The borrower is required to continue maintaining the property, paying the real estate taxes, and hazard insurance premium while the loan is in place.
How is the loan repaid? Repayment of your loan is not required until you sell your home, or have not used the home as your primary residence for more than 12 months. If you die, your heirs can either sell the home, or use other assets to pay off the loan balance.
Academy National Mortgage
Denise Wing, C.E.O.
Certified Mortgage Lender
303-987-0622
posted by Academy National Mortgage at 10:21 AM
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