Improve your life by cashing in on your home’s equity
Whether seeking money to finance a home improvement, pay off a current mortgage, supplement their retirement income, or pay for healthcare expenses, many older Americans are turning to “reverse” mortgages. They allow homeowners to convert part of the equity in their homes into cash without having to sell their homes or take on additional monthly bills.
In a “regular” mortgage, you make monthly payments to the lender. But in a “reverse” mortgage, you receive money from the lender and generally don’t have to pay it back for as long as you live in your home. Instead, the loan must be repaid when you die, sell your home, or no longer live there as your principal residence. Reverse mortgages can help homeowners who are house-rich but cash-poor stay in their homes and still meet their financial obligations.
To qualify for most reverse mortgages, you must be at least 62 and live in your home. The proceeds of a reverse mortgage (without other features, like an annuity) are generally tax-free.
Three Types of Reverse Mortgages
The three basic types of reverse mortgage are: single-purpose reverse mortgages, which are offered by some state and local government agencies and nonprofit organizations; reverse mortgages are federally insured and regulated and are known as Home Equity Conversion Mortgages (HECMs), and must meet U. S. Department of Housing and Urban Development (HUD) regulations and requirements; and proprietary reverse mortgages, which are private loans that are backed by the companies that develop them.
Single-purpose reverse mortgages generally have very low costs. But they are not available everywhere, and they only can be used for one purpose specified by the government or nonprofit lender, for example, to pay for home repairs, improvements, or property taxes. In most cases, you can qualify for these loans only if your income is low or moderate.
Reverse mortgage loan advances are not taxable, and in most cases do not affect Social Security or Medicare benefits. You retain the title to your home and do not have to make monthly repayments. The loan must be repaid when the last surviving borrower dies, sells the home, moves out of the home or defaults on other obligations such as insurance or taxes . In the HECM program, a borrower can live in a nursing home or other medical facility for up to 12 months before the loan becomes due and payable.
Affordable Interest Mortgage has a Specialist in Reverse Mortgages. He is one of our Senior Mortgage Consultants, David Olson. He has been doing Reverse Mortgage for over 10 Years and is Co Author a book title 62. He is experienced and trained in all the different options and benefits of a Reverse Mortgage. He has helped numerous clients solve some of their financial issues without having to lose their home. These materials are not from HUD or FHA and were not approved by HUD or a Government Agency.