THE REVERSE MORTGAGE

If your answer is yes to these questions you may qualify for a Reverse Mortgage.

1. Are you at least 62 years Old?
2. Do you own your own home?
3. Is it your primary residence?

What is a Reverse Mortgage?

A reverse mortgage is a loan against the equity in a home that provides tax-free advances and requires no monthly payments. A reverse mortgage is the opposite of a traditional mortgage in which the homeowner borrows a large amount of money and makes monthly payments. As payments are made, the loan balance gets smaller and the equity grows.

With a reverse mortgage, you borrow small amounts-monthly or at other intervals through a line of credit. Over the course of time, the loan balnce gets larger and equity gets smaller. Paymenet is required only once, at the end of the loan, typically after the last spouse has passed away.

Who is eligible?

• Homeowner(s) who are at least 62 years of age and occupy the property as their principal residence.
• Eligible properties include single-family homes, condominiums and townhomes, or a 2-4 unit dwelling.
• The home must be owned free and clear or have a small remaining balance that can be paid off with the reverse mortgage
• No income, employment or credit requirements are required.

How much cash can I receive?

• The amount that can be borrowed is based on a HUD formula that factors in the age of the youngest homeowner, the interest rate, appraised value and the county where the property is located.

What  are some of the benefits?

• The reverse mortgage customer always retains ownership and lives in their home.
• Cash advances can be used for any purpose.
• Loan proceeds are not considered income and will not affect Social Security or Medicare benefits. However, the monthly mortgage advances may affect eligibility for other programs. Consult your local program offices to determine how, or if, monthly reverse mortgage payments might affect a specific situation.
• The heirs can keep the home once the reverse mortgage is repaid.

What are the costs involved in obtaining a Reverse Mortgage?

• There are closing costs, which can be financed into the loan. These may include an origination fee, Title insurance, appraisal, a mortgage insurance premium and attorney fees.
• Typically, the out-of-pocket expense totals only about $300.
• You are expected to continue maintaining the property, paying the real estate taxes and hazard insurance premiums.

How is the loan repaid?

• A reverse mortgage is due and payable when the property is no longer considered the customer's principal residence.
• The loan must be repaid in one payment- either from the sale of the home or through other resources.

What type of interest rate options are there?

• The reverse mortgage is an adjustable-rate loan linked to the one-year Treasury Security Rate.
• Any adjustment in the rate has no effect on the amount or the number of loan advances the customer can receive, but causes the loan balance to grow at a faster or slower rate.

What are the tax-free* cash options?

• Lump sum advances make cash immediately available.
• Tenure plans provide fixed, monthly cash advances.
• Line of credit makes cash available upon request.***

If you have further questions on the reverse mortgage or would like to get make application please give me a call: 480-346-7419.

*Please consult a tax advisor regarding deductibility. **Reverse Mortgage borrowers are required to obtain an eligibility certificate by receiving free counseling sessions with a HUD-approved agency. Family memebers are also strongly encouraged to participate in these informative sessions. ***Not available in Texas.