Your Reverse Mortgage Questions Answered
January 3, 2019
What is a reverse mortgage loan?
Ron: A reverse mortgage allows you to access equity within your home without the obligation of a mortgage payment. You still pay property taxes, insurance, and homeowner association (HOA) dues, if any. The loan and any accumulated interest are eventually repaid when the last surviving borrower permanently departs the home at which time the estate will need to pay off the loan.
Who can qualify for a reverse mortgage?
Ron: To be eligible for a reverse mortgage, a homeowner must be 60+ years of age, own their home outright, or have a qualifying mortgage balance that can be paid off at the closing with proceeds from the reverse loan. And they must occupy the home as a primary residence.
What is the difference between a reverse mortgage and a home equity loan?
Ron: With a second mortgage, or a home equity line of credit, you are required to make monthly mortgage payments. The reverse mortgage can pay you and is available regardless of your current income. (You must demonstrate the ability to pay your current expenses, property taxes, and HOA dues, if any.) The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or Federal Housing Administration (FHA) mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. With a reverse mortgage, you cannot be foreclosed upon or forced to vacate your house because you “missed your mortgage payment.”
Passionate about what they do, Alliance offers a wide selection of reverse mortgage loan products and helps you create a personally tailored loan so you feel secure in retirement. If you think a reverse mortgage may be for you, get in touch with Alliance today.