Understanding
housing wealth
What would retirement be like if you didn’t have a monthly mortgage payment?
About 75% of “Boomers” have not saved enough for retirement. And about 68% will go into retirement with a housing-related debt. Are you considering a reverse mortgage? Perhaps you haven’t even thought about it. Either way, it’s important to get the facts straight. We’re here to help.
Shelter
in your own home
When you’re a senior, “sheltering in place” can have a whole different meaning. Home! It’s where you’ve spent the greater part of your adult life. It’s where you’ve raised children, entertained friends, created decades of memories. It’s home! Should you have to give it up now that you’re older? The NEW type of reverse mortgage may offer a solution.
the American
dream
Today’s retirees are more savvy and creative. They’re persistent in establishing legitimate ways to meet their goal, which is to thrive in retirement. And with the evolution of the reverse mortgage strategy (though often times overlooked) it’s important to understand how it works and just how to incorporate it into a retirement plan in the event the need arises.
Housing Wealth
the new type of reverse mortgage
HECM, the new type of reverse mortgage loan, can be complex. It’s important to have understanding of the correct information. The questions and answers below are typical facts. Please be sure to speak to our HECM Reverse Mortgage expert advisor and be better informed about your specific personal circumstances.
A Reverse Mortgage is just a loan that allows senior homeowners to access a portion of their home’s equity to supplement and sustain their retirement income. The loan generally does not have to be repaid until the last surviving homeowner on title permanently moves out of the property or passes away. At that time, the estate can repay the balance of the reverse mortgage loan or sell the home to pay off the balance. All remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage loan.
To be eligible for a Home Equity Conversion Mortgage (HECM) reverse mortgage loan, the homeowner must be at minimum 62 years of age. The home must be owned free and clear or all existing liens and mandatory obligations would need to be satisfied. If there is a mortgage balance, it can be paid off completely with the proceeds of the reverse mortgage loan at the closing. Many home types are eligible.
With traditional loans such as a home equity loan, a second mortgage, or a home equity line of credit (HELOC), the homeowner must still make monthly payments to repay the loans. However with a reverse mortgage loan, instead of making monthly mortgage payments to the lender, the borrower uses the loan proceeds to pay off any existing mortgage and other mandatory obligations.
In the event of death or the home ceases to be the primary residence for more than 12 months, the homeowner’s estate can choose to repay the reverse mortgage loan and keep the home or put the home up for sale in order to repay the loan.
If the equity in the home is higher than the balance of the loan, the remaining equity belongs to the heirs/estate.
If the sale of the home is not enough to pay off the reverse mortgage balance, the heirs or estate will not be responsible for the difference. No other assets are affected by a reverse mortgage. For example, investments, second homes, cars, and other valuable possessions cannot be taken from the estate to pay off the reverse mortgage.
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