Using Your Home Equity in Retirement
What is a Reverse Mortgage?
A Reverse Mortgage is a special type of home loan that allows homeowners aged 62 and older to convert a portion of their home equity into cash. Unlike traditional mortgages, with a Reverse Mortgage, you don’t make monthly payments. Instead, the loan is repaid when you sell the home, move out, or pass away.
Key Features:
No Monthly Payments: You are not required to make monthly mortgage payments, allowing you to use the funds as you see fit while continuing to live in your home.
Access to Home Equity: Convert a portion of your home’s equity into cash, which can be used for various purposes such as covering living expenses, home improvements, or medical costs.
Flexible Payout Options: Choose how you receive your funds—whether as a lump sum, monthly payments, or a line of credit, based on your financial needs and preferences.
Non-Recourse Loan: You will never owe more than the value of your home when the loan is repaid, even if the loan balance exceeds the home’s value.
Preserve Ownership: You retain ownership of your home and are responsible for property taxes, homeowners insurance, and maintenance.
Reverse Mortgage Terms:
Loan Amount: Based on home equity, age of the borrower, and current interest rates.
Payout Options: Lump sum, monthly payments, or line of credit.
Interest Rate: Variable or fixed rates, depending on the loan type and terms.
Eligibility Requirements: Age 62 or older, home as primary residence, and sufficient home equity.
Additional Costs: Closing costs, mortgage insurance premiums, and ongoing property maintenance expenses.
Offers seniors a way to access the equity in their home without the need for regular mortgage payments.”
