A Reverse Mortgage is a special type of loan that enables individuals, aged 62 or older, to convert some of their home’s equity into tax-free cash. Unlike traditional equity loans, no repayment is required until the home is no longer the principal residence and as long as other program requirements are met. And we now offer Reverse mortgage’s to purchase a home of choice.
The amount that can be borrowed is based on a HUD formula that factors in the age of the youngest homeowner, the interest rate, and the appraised value. Some of the benefits are:
- homeowner retains ownership and lives in the home
- cash advances available for any use
- proceeds are not considered income and will not affect Social Security or Medicare benefits
- Heirs can keep the property once the reverse mortgage has been repaid.
There are a variety of options to receive the cash benefits: lump sum benefits make cash immediately available; fixed monthly advances and line of credit options.
Those interested must participate in an approved counseling session designed to educate and provide complete information on the program. There are costs which can be financed into the loan. These may include an origination fee, title insurance, appraisal, a mortgage insurance premium and homeowners insurance. The homeowner must continue to pay the property taxes and future homeowners insurance.
There is no required payment on a reverse mortgage. And it is due and payable when the property is no longer considered the customers primary residence. The loan must be repaid in one payment – either from the sale of the residence or through other resources.
Eligible properties include single family homes, condominiums as well as 2to 4 unit dwellings. For additional information contact John Watts, Movement Mortgage cell: 410-274-9773 or visit me at: www.203k.com