Reverse mortgages are our specialty! We have helped many of your neighbors in Colorado eliminate their mortgage payment with a Home Equity Conversion Mortgage (HECM). We have helped many more who did not have a mortgage payment but wanted to access the substantial equity in their home.
Your home is like a piggy bank with money (equity) inside, but there are only a couple ways to access that equity. One way is to sell your home, but then where would you live? The other way is to get a reverse mortgage which is regulated by the federal government, and is a safe alternative to selling. The folks that we have worked with have one thing in common: they want to age-in-place, remaining in their homes “forever.”
Being on a fixed income can be a challenge! Stopping your mortgage payment is a big step toward a less stressful retirement. Freeing up the money formerly used for your mortgage payment may allow you to pay for help around the house with cleaning, yard work, home health care, etc.
If there is enough equity, as there often is, you can access a lump sum of cash at closing. The loan proceeds are not taxable by the federal government (check with your tax adviser), and may be used for any purpose. Alternatively, you may prefer to receive monthly payments for a set number of years, or for the rest of your life.
A line of credit is also often available, and may be accessed one year and one day after the closing. Call or email to have a free consultation with one of our experienced Reverse Mortgage Specialists. We would be happy to provide the information you need to make an informed decision.
How You Can Use a Reverse Mortgage:
A reverse mortgage makes sense whether you want to be more certain of having the financial resources to fund longevity, or you simply need to eliminate your mortgage payment to make ends meet. Financial planners are increasingly seeing the advantages of accessing the equity in your home to make retirement more stable and less stressful.
What is a Reverse Mortgage?
A reverse mortgage is a government insured FHA/HUD approved loan that allows you to access some of the equity that is tied-up in your home. You will not have mortgage payments, though you will need to maintain the home and pay property taxes and insurance.
How will the loan be repaid?
When the last borrower leaves the home, your heirs will decide whether they will keep the home or sell it. If they keep the home, they refinance the home into their own names at 95% of the appraised value at that time, or the amount of the loan balance, whichever is less. It they want to sell the home, they receive all the loan proceeds after the mortgage has been satisfied.
What if the loan balance is higher than the appraised value of the home when we pass away?
Your heirs and/or your estate is not responsible for that debt. Your heirs can refinance into their names for 95% of the appraised value of the home at that time, or they can simply sell the home. An FHA Reverse Mortgage is a non-recourse loan. That means no one ever owes more than the home is worth.
Who covers the additional cost if the loan balance is higher than the value of the property when we leave the home?
With an FHA/HUD-insured reverse mortgage, the mortgage insurance kicks in and repays the amount of the reverse mortgage that is higher than the value of the property. Your heirs and your estate are not responsible.
Who gets the additional equity if we leave the home and our heirs want to sell it?
Your heirs get any-and-all additional equity when they sell the home and satisfy the reverse mortgage.
What are the benefits of a reverse mortgage?
What may I use the loan proceeds for?
You may use the loan proceeds in any way you choose.
How do I qualify for a reverse mortgage?
At least one borrower must be 62 years or older. You must own your own home, and it must be your primary residence. Call us and we will help you with your particular situation.
Will my Social Security, Medicare or my pension be affected by the reverse mortgage?
No, the loan proceeds are not income. However, Medicaid and SSI may possibly be affected. Call us to discuss your situation.
I have a reverse mortgage, but my house has gone up in value. Can I do a second reverse mortgage to get more equity out?
Yes, you may do another reverse mortgage and get additional money out. Call us to see about your options.
What are my obligations if I get a reverse mortgage?
You must pay your property taxes, homeowners insurance and maintain your home. You may elect to have a LESA (Life Expectancy Set Aside) and the lender will pay your property taxes and insurance.
What if I have bad credit, have had a bankruptcy or a foreclosure in the past? Am I disqualified?
No, not necessarily. In most cases there is a remedy for past credit problems. Call us to evaluate your situation.