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REVERSE MORTGAGE |
What is a reverse mortgage?
- It's a special type of loan that enables individuals aged 62 or older to convert some of their home's equity into tax free cash
- Unlike traditional equity loans, you receive payment instead of making them
Who is eligible?
- Homeowner (s) who are at least 62 years of age and occupy the property as their principal residence
- Eligible properties include single-family homes, condominiums and townhomes, or a 2-to 4-unit dwelling
- The home must be owned free and clear or have a small remaining balance that can be paid off with the reverse mortgage
- No income, employment or credit requirements are required
How much cash can someone receive?
- The amount that can be borrowed is based on a HUD formula that factors in the age of the youngest homeowner, the interest rate, appraised value, and the county where the property is located
What are some of the benefits?
- The reverse mortgage customer always retains ownership and lives in their home
- Cash advances can be used for any purpose
- Loan proceeds are not considered "income" and do not affect Social Security, Medicare, SSI or Medicaid benefits
- The heirs can keep the home once the reverse mortgage is repaid
What type of interest rate options are there?
- The reverse mortgage is a variable-rate loan linked to the one-year U.S. Treasury Security Rate
- Any adjustment in the rate has no effect on the amount or the number of loan advances the customer can receive, but causes the loan balance to grow at a faster or slower rate
What are the tax-free cash options?
- Lump sum advances make cash immediately available
- Tenure plans provide fixed, monthly cash advances
- Line of credit makes cash available upon request
What are the costs involved with a reverse mortgage?
- There are closing costs, which can be financed into the loan. These may include an origination fee, title insurance, appraisal, a mortgage insurance premium and attorney fee
- Typically, the out-of-pocket expense at closing totals only about $300
- The customer is expected to continue maintaining the property, paying the real estate taxes and hazard insurance premiums
How is the loan repaid?
- The loan must be repaid - either from the sale of the home or through other resources
- Please ask your reverse mortgage consultant for details on when payment may be due
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Princeton Mortgage has team up with the Senior Lending Network
to provide you with the best reverse mortgage!
Click here to watch the Robert Wagner
commercial
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