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David Edel
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Reverse Mortgage Specialist | NMLS #634160 | 239-932-6262
You may be interested in exploring whether a reverse mortgage can be a simple way to accomplish your financial goals. It certainly is for thousands of people every month!
Reverse mortgages are government-sponsored FHA insured loans—very similar to a home equity line of credit. The biggest difference is that you're not required to make any monthly payments as long as you are living in your home! A reverse mortgage converts equity into a tangible benefit (cash), giving you a higher quality of life, and peace of mind. Please peruse this site and feel free to contact me; I'd be happy to answer any questions and provide personalized information.
A reverse mortgage is an FHA mortgage that does not require any payments, except upon the borrower's death or the sale of the home.
A reverse mortgage converts a portion of equity into cash without an obligation on the part of the homeowner to make mortgage payments. Nothing changes with the home ownership. The owners can sell their home at any time and certainly leave the home to their heirs when they pass away. Like with any mortgage, the homeowner is still responsible for paying property taxes, homeowners' insurance, HOA fees and general maintenance of the home.
A reverse mortgage is an FHA loan that allows folks 62 or better to convert a portion of their equity into tax-free cash. Instead of making monthly payments to a lender as with a traditional mortgage, the lender makes payments to the borrower.
The percentage of the appraised value that FHA allows to be borrowed is based on current interest rates and the date of birth of the youngest borrower. The older a borrower is, the higher the percentage. Typically, between 50% and 70% of the home's value can be borrowed.
The primary borrower needs to be at least 62 years old and the home needs to be their primary residence. Borrowers must also meet certain income and credit requirements. A reverse mortgage is for folks who want to access their equity to pay off their current mortgage, for home upgrades, to pay off credit cards or medical expenses, to travel or just for the overall enhanced quality of life that financial security provides.
And, it’s becoming more common now among affluent homeowners who simply want to add longevity to their retirement portfolio.
Largely based on the borrower's date of birth, the required equity to obtain a reverse mortgage can be as little as 30% all the way up to 100%.
Since there is no prepayment penalty, a reverse mortgage can be paid down or paid off at any time for any reason, including the sale of the home. One needs only to request a final payoff amount from the servicer of the loan and send them that amount.
After the passing of the last homeowner, the home will go to the heirs and the loan will become due. If the heirs want to keep the home, they can satisfy the reverse mortgage balance with their own money or get a traditional refinance. Most of the time, heirs hire a real estate professional and sell the home. Staying in communication with the servicer of the loan, the heirs have six months plus two, three-month extensions to sell the home. At the close of the sale, the reverse mortgage balance is satisfied from the proceeds of the sale and the heirs keep the difference.
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