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We’ll Help You Navigate the Process of Applying for a Reverse Mortgage

reverse mortgages

What Are Reverse Mortgages?

A reverse mortgage is a home equity loan that’s intended for older homeowners who cannot afford a monthly mortgage payment but need financial assistance. The loan is repaid after the borrower dies or moves out. Many times they are beneficial to those needing a second source of income, especially if their retirement is not covering their current expenses.

In 1989, the first federally-insured reverse mortgage was introduced. Often referred to as the home equity conversion mortgage (HECM), this type of loans was designed to assist people 62 years or older with the availability to tap into their equity without having to leave their home. Many people consider reverse mortgages as a viable option to allow them to better their financial situation. There are unique qualifications for this loan that you should consider.

Do I Qualify For a Reverse Mortgage?

The basic requirements for HECMs include:

  • You must be 62 years or older.
  • You must own your home or have a small mortgage.
  • You must live in the home.
  • Your home must be a single family home or a 2-4 unit home with the borrower occupying one of the units.
  • You must receive free or low cost counseling prior to obtaining the loan.

Who Benefits From Reverse Mortgages?

  • Those who cannot afford the cost of their home.
  • Those who wish to have access to the equity of their home.
  • Those needing money for an emergency or health care expenses.

Benefits and Drawbacks of Reverse Mortgages

There are pros and cons that every potential loan borrower should consider in order to make an informed decision. When it comes to HECMs, borrowers who meet the requirements will likely see the benefits they wished to accomplish in the first place, which is our primary goal for you. Since we want you to have the full scope of the loan, you should also consider the negatives.

These are the primary advantages of HECMs:

  • There is no monthly payment required.
  • The money can be used to pay off your current mortgage.
  • With these added funds, you can improve your cash flow.
  • You can also use this money to pay off current debts or emergency medical bills.

A few disadvantages to consider:

  • Your home may not stay within your family.
  • A borrower must keep the house and continue to pay property taxes as well as homeowners insurance.
  • Fees and closing costs may be high.

Learn More About Reverse Mortgages Today

If you or your loved one are currently considering taking out a reverse mortgage, please contact us today to learn more. We know taking out a loan is not something you wish to be doing at this moment, but it can mean the difference of having enough money for your basic needs as well as an emergency or health care expenses. At My Home Loans, we are committed to providing our customers with the initial answers they need and the knowledge to make a sound decision. Please do not hesitate to give us a call. We’re happy to answer all types of questions.