What Is A Reverse Mortgage?
A reverse mortgage, also called a Home Equity Conversion Mortgage (HECM), is a way to turn the equity locked in your home into tax-free cash without having to make monthly mortgage payments other than property taxes and homeowner’s insurance.
A reverse mortgage is a government-insured loan that enables you to gain financial independence from your ever-increasing living expenses. The bank NEVER owns your home. You continue to own your property and can live there as long as you wish, provided you meet the terms of the loan, which includes maintaining the property, paying your property taxes, and insurance. The terms to own your home under a reverse mortgage are very much the same as if you owned it without one.
Who Would Want a Reverse Mortgage?
Everyone approaching, hoping for, or already in retirement should take time to learn about how a reverse mortgage works.
Reverse mortgages have made a significant impact in the lives of those who had mortgage debt or limited retirement funds.
However, it’s a surprise to many that a reverse mortgage is not just for those with an immediate need. It’s used as a strategic retirement option for those who may have adequate resources elsewhere yet want more peace of mind and a way maximize all retirement resources. For these borrowers we work closely with their financial planner to identify whether it is appropriate.
What You Can Do With It
Your equity can be used for almost anything, including paying off your existing mortgage(s), eliminating credit card debt, medical and other bills, or simply improving your lifestyle. It’s up to you to use your money responsibly.
There are many other strategies for those who have adequate resources, but who want additional flexibilities and protections. If you’ve got a home equity loan currently, it’s time to change to a reverse mortgage growing Line of Credit.
Is a Reverse Mortgage Loan Right for You?
A reverse mortgage can be the right choice when you know the facts and understand your obligations.