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What is a Reverse Mortgage?

August 5, 2012

reverse mortgage is a loan for senior homeowners that uses a portion of the home’s equity as collateral.  The loan generally does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time, the estate has approximately 6 months to repay the balance of the reverse mortgage or sell the home to pay off the balance. All remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage. To be eligible for a reverse mortgage, the Federal Housing Administration requires that all homeowners be at least age 62. The home must be owned free and clear or all existing liens but be able to be satisfied with the reverse mortgage. If there is a mortgage balance, it can be paid off completely with the proceeds of the reverse mortgage loan at the closing. Generally there are no income or credit score requirements for a reverse mortgage.

Some Pros of a Reverse Mortgage

  • You can receive the funds in a lump-sum, monthly, a line of credit or a combination of these options
  • Homeowner can stay in the home without making monthly mortgage payments
  • Eliminates existing mortgage payments
  • Heirs are not personally liable if payoff balance exceeds home value
  • Heirs inherit any remaining equity after paying off the reverse mortgage
  • Proceeds are tax-free; however, consult with your financial advisor

Here are some helpful sites from the FHA to check out if you are looking for further information on Reverse Mortgages:

FHA Reverse Mortgages (HECMs) for Seniors

Frequently Asked Questions about HUD’s Reverse Mortgages

                                                                                                                                

If you are currently searching for a Reverse Mortgage on your home, Platinum Mortgage has the tools and people to insure a fast and easy process. Leaving you with the financial situation you want, stress free. Contact us today!

Check Us Out:
http://www.pmcmortgageloans.com/
Apply For A Loan:
http://pmcmortgageloans.com/mortgage_application.php
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