As a licensed Retirement Income Certified ProfessionalTM and Mortgage Loan Originator, NMLS 91704, my specialty is helping my clients with their concerns to raise additional cash or plan ahead for future retirement income.
For the average Retiree, almost 70 % of their Net Worth is buried in what we call the "Dead Equity", the unused equity they own in their home. Many of us will want this for other needs and wants, to help us enhance our retirement years.
The Reverse Mortgage is an effective tool for many of us to obtain the funds we need now, to eliminate future mortgage payments, create more monthly income or plan ahead with the "Line of Credit" option to have tax-free and easily obtainable cash when we need it for whatever challenge life puts in front of us later.
What is a reverse mortgage?
A HECM Reverse Mortgage is a federally approved and insured opportunity for a homeowner to access and use part of their home's equity for cash, income or future security. We also now have private Reverse Mortgages that work well for many homeowners. All Reverse Mortgages work very well for homeowners who have enough equity and want to stay in their homes and do not have a high need to leave their home to family or others.
Should the urgent need arise, how would someone get out of a reverse mortgage?
Write a check and pay the loan balance. Refinance your home with another mortgage or sell your home and the loan will be paid off at closing, just like any other mortgage.
On average, how much money does someone get from a reverse mortgage?
This varies with the value of your home and the age of the youngest borrower. Typically, homeowners will get about 35 % of their home's market value in their early 60's. This increases steadily until it reaches about 70 % when the Borrower applies in their 90's. (Any mortgage, other property liens, and closing costs will need to be paid out of this.)
Who can qualify for a reverse mortgage?
Homeowners who have sufficient home equity, age 62 or over and have adequate credit and financial capacity, together with a home that also meets federal and lender standards.
How much equity do I need to get a reverse mortgage?
We need to own about 65 % of our home's market value in our early 60's. This steadily decreases and the homeowner will only need about 30 % in their 90's.
Can I pay off my reverse mortgage early? If so, how do I do that?
There are different opportunities for both the federal approved HECM and the other private Reverse Mortgage loans. These include manufactured homes, condos, 2 to 4 multi-family homes and traditional homes.
What happens to my reverse mortgage when I die?
The Reverse Mortgage loan will need to be paid off. If any of your loved ones want the home, they can write their own check or refinance to pay this off. If they want to sell the some, the Reverse Mortgage loan is typically paid off at closing, just like any other mortgage.