For Children and Family
A reverse mortgage can allow seniors to enjoy their sunset years and leave a legacy of memories for their family.
– Instead of downsizing, a reverse mortgage could allow a family to keep a larger home so children and grandchildren can enjoy visiting.
– The funds from a reverse mortgage can fund family memories
– A reverse mortgage can allow borrowers to “age in place” by providing additional income to offset medical expenses without moving into assisted living
With a reverse mortgage, the homeowner has mortgage insurance premiums annually taken out of the available funds. These premiums protect the homeowner so that you never have to pay more than the home is worth. The homeowner always retains full title to the home; the bank does not own the property.
Further, appreciation of the home’s value generally offsets the interest earned on the reverse mortgage.
Why get a reverse mortgage?
What does the process look like?
Reach out to us to talk about how a reverse mortgage would be right for you
We’ll send you a draft of what funds you would qualify for
You’ll attend a one-on-one counseling session to have any questions answered
We’ll get started on the loan paperwork and collect some documents from you
We’ll have an appraisal ordered on the home to determine value
You’ll close on your mortgage!
Outcomes after Death
The balance on the reverse mortgage must be paid off upon the death of the borrower (or the death of both borrowers, if a couple). The family can choose to keep the home or to sell the home. Either way, the reverse mortgage will be paid off with the sale or refinanced into a traditional mortgage.
Under 2% of homes that are left to family members end up staying in the family. Most are sold and the proceeds serve as an inheritance. If you would choose to keep the home in the family, you can purchase the home for 95 cents on the dollar.
If the borrower moves out of the home prior to death, the mortgage would be paid off with the sale.
What about the interest earned on the reverse mortgage? How is it paid and won’t that mean I owe a lot of money on my home?Interest is paid annually out of the available reverse mortgage funds. Generally, the amount your home value will increase (appreciation) offsets the interest accrued.
How much could I qualify for?The available credit amount is determined by the appraised value of the home, the loan-to-value of any mortgages currently on the home, the age of the homeowner(s), and the current interest rate and margin.
Do I have to own my home free and clear?No, you can still use a reverse mortgage on your home–you would just use the reverse mortgage to pay off the existing mortgage. This would lower the amount of equity you would directly have access to.
What if my home value drops?As a part of the mortgage, you will pay an upfront fee at closing and an annual fee to FHA for mortgage insurance. This insurance protects you if the value of the home goes down. HUD (Department of Housing and Urban Development) assumes the risk, so you will never owe more than your home is worth.