If you love your home and you want to age in place, a Reverse Mortgage can keep you in the home AND eliminate a mortgage payment forever.
A Home Equity Conversion Mortgage (HECM) is a special type of mortgage that enables homeowners, age 62 and older, to tap into the equity in their home.
Unlike traditional home loans, no repayment of the mortgage is required until you no longer occupy the home as your primary residence. At that time, the mortgage becomes payable. What is borrowed, plus interest, is due to the lender, and any remaining equity remains with the homeowner’s estate/heirs.
Do both spouses have to be 62 years old to be eligible? No. If only one spouse is 62 years old you are still welcome to apply. While the loan will solely be in the name of the person who is of age, the younger spouse is still fully protected for life.
Not true. You and your family’s estate will maintain 100% ownership of the home. Just like any other mortgage, a lien is placed on the home until the loan is satisfied either by sale or refinance. The bank doesn’t own the house.
Upon your death, your heirs have 12 months to sell your home. After one year, if your family has not purchased the property or arranged a sale, the bank retains the right to facilitate the sale. If the bank sells it for more than what you owe, your heirs will receive 100% of the proceeds. If the sale price is less than the owed balance, your family is completely free from recourse.
Not true! If there is a surviving non-borrowing spouse on title that was disclosed in the underwriting process, the surviving spouse can continue to remain in the home for life and receive the benefits of the reverse mortgage without having to sell the home or pay off the mortgage.
Not True! When you have a reverse mortgage, you can sell your home anytime. Remember, you are retaining 100% ownership of your home, so you can decide to sell at any time. If you do, your reverse mortgage would be paid off at the closing, just as any other mortgage.
All reverse mortgage borrowers must also complete the HUD (Department of Housing and Urban Development) counseling class that will give them a certificate of completion. FHA/HUD department loans are government insured and they require everybody, even before the start the application process for a reverse mortgage, to take these classes.
We hoped this helped you develop a deeper understanding of reverse mortgages. If you have questions about this or anything else, give us a call at 602-535-2171 or shoot us an email at team@AZmortgagebrothers.com.
Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes. Signature Home Loans NMLS# 1007154/ #210917/ #1618695.BACK TO LIST