REVERSE MORTGAGES
How seniors tap equity for extra cash
Now Retire on Your Own Terms!
Do you need to pay off debt, cover medical expenses, or help out the kids? If you're at least 62 years old and interested in putting your home to work for you, a Reverse Mortgage may be the right solution!
A reverse mortgage is a low-interest loan for senior homeowners that converts a portion of a home’s equity into tax-free cash. The borrower receives payments from the lender, instead of making them, as in a conventional mortgage. The funds can be paid as a lump sum, monthly increments, or a line of credit — or as a combination of the three methods.
Who’s eligible?
Homeowners aged 62 and up who have paid off at least half of their mortgage balance. There are no credit or income requirements.
How much can I borrow?
That’s determined by your age, prevailing interest rates, and the appraised value of your home. The maximum amount that can be borrowed is currently $625,000; that’s scheduled to go down to $417,000 in 2010.
What’s the cost?
An origination fee is folded into the loan, as are interest, mortgage insurance, and service fees. The homeowner also must continue to pay for property taxes, insurance, and home maintenance.
Does a reverse mortgage affect my benefits?
Reverse-mortgage funds are not classified as income and thus do not affect Social Security or Medicare benefits. Other state and federal benefits, such as Medicaid, could be affected, however.
When do I have to pay it back?
Not until the last homeowner dies or until you no longer use the home as your primary residence. If the home is sold, the loan must be repaid, but the homeowners (or their heirs) can keep any extra proceeds.
What if my home can’t be sold for enough to repay the loan?
The loan repayment amount cannot exceed the market value of the home. Neither you nor your heirs are required to pay any shortfall, as long as the terms of the loan agreement have been met.
PERSONAL SERVICE
To get your questions answered IN PERSON, call Sherri Stola at 561.401.7912. |
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