Reverse Mortgage Loans

About Reverse Mortgages

A reverse mortgage is a financial solution designed for homeowners aged 62 and older, allowing them to convert a portion of their home equity into cash without selling their home.

Unlike traditional mortgages, a reverse mortgage doesn’t require monthly payments. Instead, the loan is repaid when the homeowner sells the home, moves out permanently, or passes away.

The loan amount depends on the borrower's age, home value, and current interest rates. Reverse mortgages can be used to supplement retirement income, pay off debt, or cover unexpected expenses. However, reverse mortgages can have higher interest rates and fees than traditional loans and may affect eligibility for certain government benefits. It's important to carefully consider the pros and cons before deciding if a reverse mortgage is the right option for you.

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Some Key Loan Characteristics for Reverse Mortgages

No Monthly Payments: Borrowers don’t need to make monthly mortgage payments, reducing financial stress.
Access to Home Equity: Convert your home equity into tax-free cash to use as you see fit.
Stay in Your Home: Continue living in your home while benefiting from its value.
Flexible Payment Options: Receive funds as a lump sum, monthly payments, line of credit, or a combination of these.
Non-Recourse Loan: You’ll never owe more than the home’s value when the loan is repaid.
Preserve Savings: Use your home equity to supplement retirement income without depleting other assets.

Considerations for Borrowers

Loan Costs: Reverse mortgages include fees such as origination costs, interest, and mortgage insurance, which can add up and reduce the available equity.
Ongoing Expenses: Borrowers must continue to pay property taxes, homeowner’s insurance, and maintenance costs to avoid defaulting on the loan.
Eligibility Requirements: If you plan to leave your home permanently or transition into assisted living, the loan will need to be repaid, potentially requiring the sale of the property.
Inheritance Impact: The loan balance, including interest, will need to be repaid when the homeowner passes away, which may affect heirs’ ability to retain the home.
Counseling Requirement: Borrowers are required to attend a HUD-approved counseling session to fully understand the terms and implications of the loan.
Alternatives: Consider other financial options, such as downsizing or tapping into savings, to ensure a reverse mortgage is the best choice for your needs.

Qualifying for a Reverse Mortgage

Reverse mortgage have specific requirements that need to be considered:

Age Requirement: At least one borrower must be 62 years or older.
Home Ownership: You must own your home outright or have substantial equity.
Primary Residence: The home must be your primary residence.
Financial Assessment: Borrowers must demonstrate the ability to pay property taxes, homeowner’s insurance, and maintenance costs.
Property Type: Eligible properties include single-family homes, FHA-approved condos, townhomes, and some multi-unit properties (up to 4 units).
Mandatory Counseling: Borrowers are required to attend a HUD-approved counseling session to ensure they understand the terms of the loan.

A reverse mortgage can be an excellent financial tool for seniors looking to unlock the value of their home while continuing to live there. If you’d like to learn more, contact us today to discuss your options and find out if a reverse mortgage is the right solution for your needs. Reach out at (210) 987-8943. We are happy to answer your questions and would love to work with you!

This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply.

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