What is a Reverse Mortgage?
A Reverse Mortgage is a special type of loan that enables elder homeowners to convert part of the equity in their homes into tax-free* cash without having to sell their home or give up title.  Instead of making monthly payments to the lender, as with traditional equity loans, the lender makes payments to you!  The source of the money is the equity in your home… and since your equity is your money, there are no restrictions on how you can use it!

Who is eligible?
Homeowners with enough equity who are at least 62 years of age and occupy the property as their principal residence are eligible for a Reverse Mortgage.  There are no income, employment or credit requirements!  Eligible properties include single-family homes and 2-4 unit dwellings, as well as approved condos, town-homes and manufactured homes.

What type of interest rate options are there?
The Reverse Mortgage is an adjustable-rate loan linked to the one-year U.S. Treasury Security Rate.  Once the loan is closed, adjustments in the rate have no effect on the number or amount of loan advances the customer can receive, but rather cause the loan balance to grow at a faster or slower rate.

How much cash can someone receive?
The amount that can be borrowed is based on a HUD formula that factors in the age of the youngest homeowner, interest rate (locked or current at time of closing, whichever is lower), appraised value, and the lending limit of the county where the property is located.  The older you are and the more equity you have in your home, the more money you will have access to.

What are the payment options?

• Cash Advance - Receive all or part of your available cash up-front when the loan funds.
• Term - Receive fixed monthly payments for a fixed amount of time chosen by you.
• Tenure - Receive fixed monthly payments for as long as you live in the home.
• Line of Credit - Request the amount of cash you want when you want it.

*    All funds received from a Reverse Mortgage are tax-free!

What are the costs involved with a Reverse Mortgage?
Closing costs can be financed into the loan. FHA approved costs include an origination fee, FHA Mortgage Insurance, title insurance, appraisal, credit and any other actual third party costs.  The customer is expected to continue maintaining the property and paying the real estate taxes and hazard insurance premium.

How is the loan repaid?
A Reverse Mortgage is never due and payable until the homeowner no longer occupies the property as their principal residence.  The loan can be repaid by the homeowner or heirs through sale of the home, refinance, or other resources.  As long as you live in the home as your primary residence, it can never be taken from you… and you are guaranteed to never owe more than the home is worth.

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