A Reverse Mortgage is exactly what the name implies. Instead of you paying monthly on a mortgage for your home, you have no payment except for property taxes and insurance. Monthly interest you owe grows on top each month and you do not have to pay it back until you die, sell your home, or move out of the home.
A Reverse Mortgage is not for everyone. They are good for those who really need the funds especially if the primary earner has passed away. However, Reverse Mortgages have several requirements that are extremely important to consider and research before applying.
First, in order to qualify for a Reverse Mortgage, you must be 62 or older. Reverse Mortgages also have fees associated with them. Since the mortgage grows with interest every month proportional to what you borrowed, you may owe more than what it is valued at when it comes time to sell your home. The real estate market has been great in most of the United States, but that can change quickly.
The Home Equity Conversion Mortgages (HECM) are federally insured and backed by the U.S. Department of Housing and Urban Development (HUD). Before applying, you must meet with a counselor from an independent government-approved housing counseling agency. The counselor is required to explain the loan costs and financial implications.
Always be cautious. If it sounds too good to be true, it just may not be for you. You can call a mortgage lender that specializes in a Reverse Mortgages or give us a call! At 55+ Real Estate Services we can assist you with some recommendations and connect you with Reverse Mortgage Professionals!