A reverse mortgage is a loan available to homeowners age 62 or older that lets them convert a portion of their home equity into tax-free cash with no monthly mortgage payments required. You retain title and ownership of your home throughout the life of the loan. The loan is repaid when the borrower sells the home, moves out, or passes away.
With a Home Equity Conversion Mortgage (HECM), the most common type of reverse mortgage and insured by FHA, you retain title to your home and can receive funds as a lump sum, monthly payments, a growing line of credit, or any combination. You must continue to pay property taxes, homeowners insurance, and maintain the home.
To qualify for a HECM reverse mortgage you must be 62 or older, own the home outright or have significant equity, live in the home as your primary residence, and complete HUD-approved reverse mortgage counseling. Eligible property types include single-family homes, FHA-approved condos, and manufactured homes that meet FHA requirements.
A HECM for Purchase allows seniors to buy a new home using a reverse mortgage. It combines a down payment (typically 45% to 60% of the purchase price) with the reverse mortgage to eliminate ongoing monthly payments on the new home entirely.
Reverse mortgages are complex products that deserve careful consideration. Rob Tennyson can walk you through how a reverse mortgage would work for your specific situation, including a detailed breakdown of costs, proceeds, and payout options. Call 714-400-2317 or apply by clicking here.
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