Reverse Mortgages Explained

 Reverse Mortgages

Many of our senior's today simply do not have enough income to live on and pay monthly expenses. It is not uncommon for us to see seniors who have resorted to using credit cards to pay for medicine, insurance and other debts.

There are many seniors who own their own home free and clear or have a small balance on a mortgage. The equity in their home can be used in many ways. For example: payoff existing mortgage, subsidize monthly income, home repairs, payoff credit cards or other debts.

A reverse mortgage (HECM Program) is a government backed loan provided exclusively for seniors over age 62. Generally this will provide to you anywhere from 40 percent to 75 percent of the appraised value of your home. The older you are the more you get. If you have a mortgage this must be paid out of loan proceeds first.

As an example: Mrs. Jones, age 71, value of home $80,000, owns her home and has a mortgage of $5,000. She also owes $4,000 on credit cards. We would pay off the mortgage and give her a check for $4,000 and create a line of credit for her of approximately $27,000. She can get money monthly from this line of credit in amounts she chooses up to the maximum. She would also have funds available to meet emergencies, as well as creating a reserve fund for extraordinary home repairs such as a new roof or furnace.

Here are a few important things to know: You must occupy your home as your primary residence. The load proceeds are non-taxable. There are no income or credit criteria to get this loan. There are no payments for the rest of your life. Closing costs are included in the loan. It takes about 30 days to close. You still own your home (lender does not acquire title).

The reverse mortgage loan is repaid by either of the following events: You sell your home during your lifetime; your heirs sell your home after the last survivor passes.

For seniors who own their home free and clear they may choose to get a lump sum cash payment, monthly payments for life, line of credit or any combination of the above. We help the seniors choose which alternative is best for them.

Please don't delay in taking advantage of this special program created for seniors by your U.S. Government. Senior's Equity Income, Inc. is an approved FHA mortgage lender. We are also a member of the "National Association of Reverse Mortgage Lenders."