With a reverse mortgage, qualified senior homeowners age 62+ can convert home equity into supplemental retirement cash flow. A reverse mortgage can help provide seniors the financial security they need to stay at home and live independently - without having to sell their house, give up the title, or make monthly mortgage payments.
What is a Reverse Mortgage?
Most homeowners are familiar with the traditional home mortgage. An individual buys a home, and, over time, as the monthly payments are made, the balance due on the mortgage is gradually decreased. A homeowner's equity - the difference between what is owed and the market value - is also increased if a home's market value increases. In the traditional, forward mortgage, as debt decreases, equity increases.
A reverse mortgage works in the other direction. With a reverse mortgage, cash flows from a lender to a borrower. Over time, the balance due increases. In a reverse mortgage, as debt increases, equity decreases.
Maximum Loan Balance
Reverse mortgage payments require that all borrowers be at least 62 years of age. The home must be owner-occupied, and be the borrower's principal residence. Not all types of homes qualify; most programs accept single-family detached homes, and some allow 2-4 unit owner-occupied homes, condominiums and manufactured homes. Only first mortgages are permitted. Any other debt secured by the home must either be first paid off, or paid off with proceeds from the reverse mortgage.
For more information about a Reverse Mortgage, contact our office at (508) 998-8858.