Take advantage of all of the hard work you have put into your home.
A reverse mortgage allows you to tap into the equity of the home you have worked hard for and use the money for repairs, medical expenses, or even a trip around the world.
What Is a Reverse Mortgage?
With a typical mortgage, monthly payments are made to the lender to pay the loan back. With a reverse mortgage, there is no obligation to pay the money back until you no longer live in the home. The money you receive is tax free and there are typically no income restrictions. The amount you receive is entirely dependent on the value of the property. A Home Equity Conversion Mortgage (HECM) is part of a federally insured reverse mortgage program that is backed by the U.S. Department of Housing and Urban Development (HUD). These loans are widely available and have no income or medical requirements.
Qualifying For a Reverse Mortgage
To qualify you will first be asked to meet with a financial counselor from an independently operated, yet government-approved, housing counseling agency. The cost of the loan and its financial implications will be explained to you in detail. Follow this link for FAQ’s about reverse mortgages. You will also be shown other types of mortgage products to help you understand the differences in structure and cost. If you choose an HECM mortgage, you will be given four options to choose from.
- Term loan – This allows you a fixed cash amount for a specific amount of time.
- Tenure loan – Fixed monthly cash advances for as long as you are living in the home.
- Line of credit – This gives you more flexibility as you can withdraw the amount you want anytime you want. This is a good option if you plan on using the loan to fund a trip or make renovations on your home.
- You may also choose a combination of the two.
How to Use the Funds From a Reverse Mortgage
No matter which form of payment you decide on, the money is yours to spend however you see fit. The amount you receive is based on how much your home is worth minus any existing mortgages you may still be paying on it. The amount you receive is not taxable and will have no bearing on any aid you receive, such as social security or medicare. The title to the house remains in your name and there is no obligation to make any repayments. The full amount you borrowed will be paid once you no longer use the home as your primary residence.
A mortgage representative from Better Rate Mortgage can help you go over all of the points to make sure that this is the best option in your circumstance. Many Missouri homeowners use this as a way to supplement their income after retirement in order to continue with the quality of life they are accustomed to. You have spent many years working on building equity into your home. Now is the time to let your hard work pay off for you!