Reverse Mortgage Loan
What is a reverse mortgage? It is no longer considered the loan of last resort. The reverse mortgage loan of today allows borrowers to convert the equity in their home into cash. This cash is usually tax-free* and there are no required monthly mortgage payments. This is a loan that is taken out against the senior’s home equity, and is typically repaid in one lump sum when the last borrower leaves the home permanently. The loan does require the borrower to continue to make payments for property taxes, homeowners insurance, and maintenance (i.e. HOA fees if applicable).
*This advertisement does not constitute tax advice. Please consult a tax advisor regarding your specific situation.
Reverse Mortgage Benefits & Eligibility Requirements:
Qualifying for this loan is easier than a standard mortgage.
- Must be at least 62 years of age
- Be a homeowner with equity of at least 50%
- House must be your primary residence (6 months + 1 day per year)
- Live in a single family house, 2- 4 unit dwelling or an FHA approved condo
- Purchasing a new home – have adequate funds for the down payment
- Have the ability to pay property taxes, homeowners insurance and HOA dues if applicable
Reverse Mortgage Loan FAQs
Why Would I Consider a Reverse Mortgage?
Potential Benefits Include:
- Remove required mortgage payment (Borrower must still pay taxes, insurance, and maintain the home)
- Be proactive not reactive to cash flow challenges
- Bridge the Medicare gap from 62 - 65
- Have funds for when an accident / illness occur
- Stop working –either part time / full time
- Allow assets in your portfolio to grow / stay invested*
- Let the house pay for itself – repairs / taxes / HOI / HOA
- Fund your Long Term Care
- Use funds to gift to family while you are alive and see the joy & benefit it provides
- Use funds for grandchildren’s college
- Remove expensive credit card debt*
- Funds available are non-taxable*
- Donate to your favorite charity
- Have funds to travel
- Standby cash reserves
- Downsizing – use this loan to buy a new house
- Supplement your invested assets with another source of funds*
- Age in place
- Use as a strategy amidst gray divorce**
- Potential tax strategy to reduce capital gains*
*This advertisement does not constitute tax and/or financial advice. Please consult a tax and/or financial advisor regarding your specific situation. ** This advertisement does not constitute legal advice. Please consult a legal advisor regarding your specific situation.
Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency. Reverse mortgage borrowers are required to obtain an eligibility certificate by receiving counseling sessions with a HUD-approved agency. Youngest borrower must be at least 62 years old. Your monthly reverse mortgage advances may affect your eligibility for some other programs. At the conclusion of the term of the reverse mortgage loan contract, some or all of the equity in the property that is the subject of the reverse mortgage no longer belongs to you, and you may need to sell or transfer the property to repay the proceeds of the reverse mortgage with interest from your assets. We will charge an origination fee, a mortgage insurance premium, closing costs or servicing fees for the reverse mortgage, all or any of which we will add to the balance of the reverse mortgage loan. The balance of the reverse mortgage loan grows over time, and interest will be charged on the outstanding loan balance. You retain title to the property that is the subject of the reverse mortgage until you sell or transfer the property, and you are therefore responsible for paying property taxes, insurance, maintenance and related taxes. Failing to pay these amounts may cause the reverse mortgage loan to become due immediately and may subject the property to a tax lien or other encumbrance or to possible foreclosure. Interest on reverse mortgage is not deductible to your income tax return until you repay all or part of the reverse mortgage loan. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply.