WHO'S A GOOD CANDIDATE FOR REVERSE MORTGAGE?

A reverse mortgage can be a helpful program for people over the age of 62 who are finding it difficult to meet their monthly needs, or those who need a bit more living expense income than their current means allow.

HOW REVERSE MORTGAGES WORK

Homeowners 62 and older who have paid off their mortgage or have a smaller mortgage balance remaining are eligible to participate in a reverse mortgage program. The program allows homeowners to borrow against the equity in their homes.

Homeowners can receive payments in a lump sum, on a monthly basis (for a fixed term or for as long as they live in the home), or on an occasional basis as a line of credit, however, homeowners can usually restructure their payment options if necessary.

Unlike ordinary home equity loans, a HUD reverse mortgage does not require repayment as long as the borrower lives in the home. Lenders recover their principal, plus interest, when the home is sold or refinanced by the heirs. The remaining value of the home goes to the homeowner or to his or her survivors. If the sales proceeds are insufficient to pay the amount owed, HUD will pay the lender the amount of the shortfall. The Federal Housing Administration, which is part of HUD, collects an insurance premium from all borrowers to provide this coverage.

The size of reverse mortgage loans is determined by the borrower's age, the interest rate, and the home's value; the older a borrower, the larger the percentage of the home's value that can be borrowed.

To get more information about reverse mortgages, contact our office and we can help you find professionals and resources to help you.