Retire in a home that’s right for you
A reverse mortgage can be used to turn a portion of the equity in your home into cash that can be used for many different purposes that may enhance and extend your retirement. If you currently have a mortgage, a reverse mortgage could eliminate your mortgage payment (taxes and insurance must still be paid, and the home maintained), and also allow you to access any additional equity (over and above your mortgage balance), to create accessible cash which is not readily available while in the form of home equity.
What is a reverse mortgage loan?
If you’re 62 or older, you can use a reverse mortgage loan to purchase a new home or turn your current home’s equity into cash. A reverse mortgage local gives you the opportunity to potentially increase your purchase power or cash flow while eliminating monthly mortgage payments as long as you pay taxes and insurance and maintain the home.
The Home Equity Conversion Morgage for Purchase (H4P) can help them find a home that fits their needs with no monthly mortgage payments, except for taxes, insurance, and general maintenance. An H4P (a type of HECM backed by the FHA) enables senior homebuyers to purchase a new primary residence that better suits their needs and obtain a reverse mortgage in one transaction. You can use an H4P if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.
The benefits of a reverse mortgage
A reverse mortgage loan could help you:
- Purchase in a 55+ community
- Increase your purchasing power and flexibility
- Eliminate monthly mortgage payments (taxes, insurance, and maintenance required)
- Purchase a home for 30-70% down (The down payment required is determined on a number of factors, including borrower(s) age (and non-borrowing spouse’s age) if applicable, current interest rates, and the lesser of the homes’ appraised value of purchase price.)
- Close in as little as 17 days (17 day close based on receiving an appraisal within 10 days of ordering it with no contingencies)
Eligibility requirements for a reverse mortgage loan
- Borrower(s) must be 62 years or older
- Must be a homeowner and either own home outright or have significant equity; must live in home as primary residence (live there 6+ months per year)
- Property must be a single-family home, 2- to 4-unit dwelling or FHA-approved condo
- Must meet minimal credit and property requirements
- Must receive reverse mortgage counseling from a HUD-approved counseling agency
- Must not be delinquent on any federal debt
Source: Fairway Independent Mortgage Company | Link
Got questions? Contact us via the form below and we’ll connect you with a local reverse mortgage planner at Fairway Independent Mortgage Company.