Reverse Mortgages
Click on the consumer guide link below to read more about these programs
What is a reverse mortgage?
A reverse mortgage is a home loan that allows seniors, 62 and older, to access the equity in the home and turn it into cash! With the cost of living rising at an alarming rate, seniors on fixed income can greatly benefit from these government backed loans. If you were to think of this loan in a traditional sense, it is simply a home equity loan with no monthly payment! The monthly payment is deferred until you sell the property, or in the event of your death, your estate would settle the loan.
There are several different reverse mortgage programs. Fannie Mae Home KeeperŪ, Jumbo Cash Account, the HUD-insured Home Equity Conversion Mortgage (HECM), a Fixed Rate product from Bank of New York, and other proprietary products that are coming to this growing market. are three such programs As demand increases, more reverse mortgage programs from different organizations will become available. As a commitment to our industry, we will always offer every product that is available to the senior market.
What are some of the benefits of a reverse mortgage?
- Supplement your retirement income.
- Help pay for health care needs
- The Reverse Mortgage Proceeds are tax free!
- Keep your Medicare or Social Security benefits.
- Use it as a credit line and draw upon it as needed.
- Get all your cash right away.
- Get the best of both—get cash now and have a balance in reserve to use as a credit line.
- No Income Requirements: The homeowner does not need to be working and is not qualified based on income.
As the homeowner receives monthly cash income, the loan balance increases. In the following twelve-month example, the homeowner begins with a debt-free home. As money is received by the homeowner, the mortgage grows. By the end of month twelve, the homeowner owes the bank $6,000 plus $232.44 interest. All Reverse Mortgage loans have a variable rate.
Assumptions*
| Regular monthly advances |
$500 |
| Annual interest rate |
7.0 % |
| Monthly interest rate |
.583% (.07 / 12) |
| 0 |
0 |
0.00 |
0.00 |
$500.00 |
| 1 |
$500.00 |
$2.92 |
$502.92 |
$500.00 |
| 2 |
$1,002.92 |
$5.85 |
$1,008.77 |
$500.00 |
| 3 |
$1,508.77 |
$8.80 |
$1,517.57 |
$500.00 |
| 4 |
$2,017.57 |
$11.77 |
$2,029.34 |
$500.00 |
| 5 |
$2,529.34 |
$14.75 |
$2,544.09 |
$500.00 |
| 6 |
$3,044.09 |
$17.76 |
$3,061.85 |
$500.00 |
| 7 |
$3,561.85 |
$20.78 |
$3,582.63 |
$500.00 |
| 8 |
$4,082.63 |
$23.82 |
$4,106.44 |
$500.00 |
| 9 |
$4,606.44 |
$26.87 |
$4,633.31 |
$500.00 |
| 10 |
$5,133.31 |
$29.94 |
$5,163.26 |
$500.00 |
| 11 |
$5,663.26 |
$33.04 |
$5,696.29 |
$500.00 |
| 12 |
$6,196.29 |
$36.15 |
$6,232.44 |
$500.00 |
*Many criteria are considered when determining the reverse mortgage loan amount, interest rate, etc.
Read our Reverse Mortgage Consumers Guide for more information - CLICK HERE for PDF
|
