If you’re 62 or older and are looking for a way to supplement your income, a reverse mortgage may provide the extra funds you need to live a more comfortable retirement. A Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, is a Federal Housing Administration insured loan. A HECM enables seniors to access a portion of their home’s equity to obtain tax free1 funds without having to make monthly mortgage payments.2 Many seniors use the funds to consolidate debt, make home improvements, pay for medical expenses or cover unexpected expenses. The loan typically becomes due when the borrower moves out of the home as their primary residence or passes away. At that time, the borrower or their heirs can choose to repay the reverse mortgage loan and keep the home, or sell the home to repay the loan.
According to a recent survey, “…borrowers report high satisfaction overall when it comes to using a reverse mortgage to foster independence and improve well-being.” In fact, “A wide majority (83%) of seniors who received Home Equity Conversion Mortgage (HECM) counseling and decided to follow through with a reverse mortgage said they were “satisfied” or “very satisfied” with their decision.”3
The survey was conducted by researchers from Ohio State University, and funded by the MacArthur Foundation and the Department of Housing and Urban Development (HUD). The goal of the study was to “…gain a better understanding of reverse mortgages and their impact on borrowers’ financial security, well-being and independence in old age.”3
The research found that “While a majority of respondents expressed satisfaction with their reverse mortgages, even those who eventually terminated their HECMs (78%) also felt “satisfied” or “very satisfied.” In fact, “76% of active borrowers and 65% of terminated borrowers” agreed with the statement that “Having a reverse mortgage improved the quality of my life.” In addition, the survey found that “Although all groups of HECM borrowers report high satisfaction with their home conditions, the data indicates that active HECM borrowers have higher levels of satisfaction than their survey peers.”3
If you’re interested in joining the many borrowers that are already enjoying the benefits of a reverse mortgage, try our Reverse Mortgage Calculator or call us today at 800-218-1415.
1 Consult your financial advisor and appropriate government agencies for any effect on taxes or government benefits.
2 You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance and maintain the home according to Federal Housing Administration requirements.
3 Study: Reverse Mortgage Borrowers Report High Satisfaction Levels, by Jason Oliva, 3/13/16, http://reversemortgagedaily.com/2016/03/13/study-reverse-mortgage-borrowers-report-high-satisfaction-levels/.
Author: Meredith Manz