Reverse Mortgage

Reverse mortgages (also called home equity conversion mortgage (HECM)) enable elderly homeowners to turn their equity into income. Most reverse mortgages require the borrower be at least 62 years of age, have a low or zero balance owed against the home and maintain the property as their principal residence. The size of the mortgage obtained depends on the applicant's age and amount of equity in their primary residence.

The borrower may receive a lump sum, a monthly payment or a line of credit. There are NO requirements on the use of funds received. The borrower may use the funds in any way they wish. Repayment is not necessary until the borrower sells the property, moves out of the property or passes away. When the home is sold or no longer used as the borrowers primary residence, the borrower or their estate must repay the lien recorded against the property. You will never owe more than the value of the home.

Reverse mortgages are ideal for homeowners who are retired or no longer working and need to supplement their income. Interest rates can be fixed or adjustable and the money is nontaxable, and should not interfere with Social Security or Medicare benefits. The lender cannot take the property away if the borrower outlives the loan; nor can they be forced to sell the home to pay off the loan, even if the loan balance grows to exceed the property value. This is called "The Non-Recourse Feature" of the loan.