Why Get a Reverse Mortgage?

Seniors are using reverse mortgages to:

• Supplement retirement income
• Cover medical expenses
• Pay existing mortgages/liens
• Make home repairs or improvements
• Pay property taxes
• Pay for in‑home care or health needs
• Reduce burden on children
• Cover daily living expenses
• Pay for grandchildren’s college tuition
• Travel & leisure

Consumer Safeguards

The Home Equity Conversion Mortgage (HECM) is insured by the Department of Housing and Urban Development (HUD) and inherently comes with some federal protections.

Interest Rates
The interest rate is the same no matter which lender a senior chooses.

Limitation on Fees
Origination fees are limited by HUD regulations and may be financed as part of the reverse mortgage.

Non-Recourse
This means that the amount due can never exceed what the home is worth. After the reverse mortgage is paid any remaining equity belongs to the heirs/estate.

Advance Disclosure
As required by federal and some state laws a senior is made fully aware of the costs in obtaining a reverse mortgage during the illustration and application stage.

Independent Counseling
Before a reverse mortgage application can be processed, the prospective borrower(s) must first meet with an independent counselor.

No Prepayment Penalty
Although the loan is not due and payable until the senior permanently moves out of the home, it can be paid-off at any point without penalty.

No Penalty for Canceling the Loan
After the loan closes, a senior has up to three days to cancel the transaction for any reason.

Reverse Mortgage vs. Traditional Mortgages or HELOCs

For years seniors have attempted to tap the equity in their homes via a traditional refinancing of their mortgage or the more popular home equity loan or home equity line of credit. In all these cases, this option requires an immediate and monthly repayment obligation. Furthermore, you first need to qualify (income, credit, asset requirements) – often difficult for retirees.

The opposite of a traditional mortgage, a reverse mortgage eliminates the mortgage payment, and, there are no credit, income, or asset requirements.

Repayment of the reverse mortgage is not required until you no longer occupy the home as your principal residence.

To summarize, you can tap the equity in your home by:

Selling your home and either renting or purchasing a less expensive home.

Refinance, which requires a monthly mortgage payment.

Get a reverse mortgage and receive tax-free income without a monthly mortgage payment.

Benefits

For many older homeowners, a reverse mortgage is an effective way to convert home equity into flexible, tax‑free income. The benefits are numerous:

• Retain ownership of your home
• No monthly mortgage payments
• Does not effect your Social Security or Medicare benefits
• Insured by the Federal Government
• Continue to live in your own home and retain legal title
• Increases your financial independence
• Benefits continue in the event of the death of one of the borrowers
• Enjoy the flexibility of determining how you wish to receive your cash disbursements: fixed monthly payments, a line of credit, a lump sum cash advance, or a combination of the plans.
• You nor your heirs will never owe more than what you could sell your home for – non-recourse loan.
• Have peace of mind knowing that you and your heirs have no personal liability for the repayment of the loan since it is secured solely by your home.
• Age in place and on your own terms.
• The costs of a reverse mortgage can be financed into the loan.
• Relax . . . knowing that a long as at least one borrower continues to live in the home, the loan does not become due.