Throughout our lives our financial situations change. You plan and prepare for the later years. What happens if something unexpected arises? You live longer than you anticipated, an illness occurs to you or a spouse, or the cost of living exceeds what you had prepared for? There is help. The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), has developed a program that they insure. It is called the Home Equity Conversion Mortgage, (HECM) otherwise known as a Reverse Mortgage.

A Reverse Mortgage allows homeowners who are 62 or older to convert a portion of their home equity into cash. No repayment is due as long as you or a spouse continues to live in your home as your primary residence. You always maintain ownership of your property.

By letting your home pay you back, you can improve your quality of life. Best of all, you will always have the security of staying in your home and never have to repay the debt as long as you live in your home.

Who Qualifies for a Reverse Mortgage?

        Any homeowner who is 62 years old or older and occupies his or her property as their primary residence.
        Any home or condo that meets government standards (which is a majority of properties)
        There are no income or asset qualifications.

What can I do with the tax free money?

The tax free money is yours to use however you choose. The list is unlimited; however, here are some of the most frequently  used ways:

     Pay off existing mortgages or credit card debt
     Help pay for taxes, insurance or assessments on your property
     Make home improvements
     Vacation or travel
     Supplement your income
     Have home health care for you or your spouse
     Pay for long term health care insurance

  The amount of money you can receive is based on the following: 

        Age
        The lending limit in your county
        The value of your property
        The current interest rate.

What choices do I have to receive the money?

 You can receive your money in the manner best suited to your needs. Here are the most popular options currently available:

           A Lump Sum Payout – This feature allows you to take all of the funds available to you immediately and all at one time.

         Credit Growth Line – This allows you to establish a credit interest growth line. The money available can be accessed by submitting a voucher. A check will be sent to you or directly deposited into your checking account. You only take what you need; the rest actually grows over time. If you don’t use the funds, it remains as equity in your property.

        Monthly Tenure Plan – With this option, you will receive a lifetime monthly payment, as long as you or your spouse lives in your property.

        Monthly Term Plan – This plan was developed to allow you to receive a fixed amount of money over a determined number of years. 

One of the unusual features to a reverse mortgage is you have the ability to pick and choose your payment plans. You can even change your plan down the road. Your Reverse Mortgage is developed to meet your needs and can be customized to fit your life. It is our job to assist you in selecting the best payment plan for your particular needs.

What are the costs?
There are fees to obtain a Reverse Mortgage, but you are not required to pay them out of pocket. The financed charges are   established and regulated by HUD. The lender will finance them into the loan balance. The fees will vary by home value and the specific Reverse Mortgage program you choose. Typical fees include lender fees, doc stamps, and title charges. In addition, on all FHA Reverse Mortgages a mortgage insurance premium is paid to the FHA to protect you and your heirs against any deficiencies . . . this is the security and stability of the program.

What if I have a mortgage?
Any existing mortgage or lien on title would be paid off out of the proceeds of a Reverse Mortgage. The good news is once your mortgage is satisfied you will never make another mortgage payment again. Any remaining equity can be paid to you by one of the payment options previously discussed. Even if your mortgage is currently delinquent, or you are in the process of a foreclosure, we may be able to save your home by doing a Reverse Mortgage.

Will I ever be forced to move?
As long as you fulfill your responsibility to occupy the property as your primary residence and pay your property taxes, insurances and association dues you will never be forced to leave your home. 

How is a Reverse Mortgage repaid?
A Reverse Mortgage only becomes due and payable when the last surviving borrower dies, sells the home, or permanently moves out of the home. At this time, you or your heirs must repay all of your cash advances plus whatever interest has accrued. A Reverse Mortgage can be satisfied without selling the home. If the home is sold the mortgage will be repaid and you or your heirs are entitled to all the remaining equity in the property. Neither you nor your heirs can ever owe more to the lender than what the market value of your home is at the time of repayment. If the loan amount ever exceeds the value of the property, for any reason, the Federal Government would be responsible to make up the difference to the lender and you or your heirs would never be forced to pay any money out of pocket to satisfy the Reverse Mortgage. You can never leave a debt or lien to your heirs or your estate.

Lending Limit:
The lending limit for the HECM reverse mortgage has been increased to a National Mortgage Limit of $625,500. The value of your property made exceed this limit, but for mortgage calculations the maximum lending would be $625,500.