If you are researching various ways to obtain financial stability in retirement, please take a few moments to watch our reverse mortgage video. This video explains what a reverse mortgage is and it will give you a good idea of how this loan may work for you. You’ll learn that a reverse mortgage loan may be a solution to help pay for everyday costs like prescriptions, doctor bills, or home repairs.
A reverse mortgage is a loan available to senior homeowners, aged 62 or older, which allows them to convert a part of their home’s equity into cash or a line of credit. The most common type of reverse mortgage is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA)
A reverse mortgage is different from other loan types because it does not require monthly payments or become due and payable for as long as the borrower lives in the home as their primary residence, continues to pay required property taxes and insurance, and maintains the home according to the HECM program requirements.
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Important Disclosures: The funds available to the borrower may be restricted for the first 12 months after loan closing, due to HECM reverse mortgage requirements. In addition, the borrower may need to set aside additional funds from the loan proceeds to pay for taxes and insurance. You must still live in the home as your primary residence, continue to pay required property taxes and homeowners insurance, and maintain the home according to Federal Housing Administration requirements. Failing to meet these requirements can trigger a loan default that may result in foreclosure.
What is a reverse mortgage video transcript: A reverse mortgage is a government-insured loan that allows seniors to convert a portion of their home’s equity into useable funds. When you take out a reverse mortgage, you can continue to live and enjoy your home, and you can use the money any way you want to. It’s called a reverse mortgage because unlike a traditional home mortgage or equity loan, you don’t have monthly mortgage payments. Instead, the reverse mortgage pays you part of the equity you have built in your home all at once, as a line of credit or on a monthly basis. You decide. The most common type of reverse mortgage is called a home equity conversion mortgage, also known as a HECM. This is the only reverse mortgage program that is insured by the US government. Based on an AARP study, nine out of 10 seniors that take out a reverse mortgage believe that it has had a positive impact on their lives and reported that they were satisfied with their reverse mortgage loan. Many borrowers use a reverse mortgage to pay off their existing home mortgage, eliminate high-interest debt such as credit cards, increase their cash flow, supplement their retirement income, make home improvements, or cover medical expenses or healthcare.