A Reverse Mortgage, or more accurately, a Home Equity Conversion Mortgage is an FHA loan that enables established homeowners (ages 62 and up) to convert equity in their homes into tax-free cash, without selling their home, giving up title, or incurring a new monthly mortgage payment. The proceeds from the loan can be used for anything the homeowner desires. With a reverse mortgage, the borrower does not have to make any payments as long as he/she lives in the home. The loan is repaid when the borrower dies, sells the home, or when the home is no longer the borrower's primary residence.
The amount the homeowner is eligible to receive depends on various factors including the age of the youngest borrower, the value of the home and current interest rates. The money is not taxable income and does not directly affect Medicare or Social Security Benefits.
There are no income or credit requirements beyond proving that the borrower is able to continue to pay the taxes and insurance associated with the home.
Since the Home Equity Conversion Mortgage is a an FHA loan administered by the Department of Housing and Urban Development, the homeowner is required to complete a counseling session to make sure he/she understands all the details of the loan.
For more details on the Reverse Mortgage, or to find out if you qualify call us today at 888-247-5757.