What is a Reverse Mortgage?

What is a Reverse Mortgage?

A reverse mortgage, also known as a home equity conversion mortgage, is similar to a traditional mortgage in the following ways:

  • You borrow money based on the value of your home.
  • You remain the owner of your home.*
  • You can sell the home or pay off the loan early with no penalty. However, this loan comes with a few unique features:
  • You can make payments if you like. No monthly mortgage payments are required, but
  • you remain responsible for property taxes, homeowners insurance, and maintenance of your property.
  • The amount of funds available to you in the line of credit option may increase over time.
  • You have the ability to receive money in a lump sum, monthly disbursements, or use the line of credit and take money when you want or need it.
  • You have protection against declining home values because it is a non-recourse loan meaning you never owe more than the value of your home.

Who Is Eligible?

  • You must own a home.
  • At least one homeowner must be 62 or older.

Eligibility Fact: The home can be paid off or have an existin

Why Use a Home Equity Conversion Mortgage?

There are a variety of reasons why people get this type of loan. Some get it to fulfill for an immediate need while others use it to plan for the future. Planning for Now:

  • Increase monthly cash flow by eliminating your monthly mortgage payment*
  • Consolidate debt
  • Pay for healthcare and medical expenses
  • Have the ability to do more during retirement
  • Make a substantial purchase (like a vacation home, car, etc.)

Planning for the Future:

  • Use the money received to live on now so other investments can be used later after having more time to grow
  • Delay using other retirement benefits until payouts are higher
  • Have funds in place for future or unexpected expenses
  • Have access to all funds available in your line of credit, regardless of changes in your home’s value
Eligibility Fact: The home can be paid off or have an existing mortgage.

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