Reverse Mortgages

Reverse mortgage loans are specifically targeted home loans that allow for seniors to access the equity in their home to supplement their income, pay off other debts and eliminate their house payments. These loans are only for individuals over the age of 62. This type of loan is designed for seniors over the age of 62 who have equity in their homes, but may need to improve their cash flow. Most reverse mortgage today are insured through the FHA, and are commonly referred to as HECM mortgage (Home Equity Conversion Mortgage).

Qualifying for a reverse mortgage is based on three main factors, the borrower’s age, value of the home and loan program they choose. One of the unique benefits of reverse mortgages is that it may allow the homeowner to create a monthly income stream from the properties equity. Essentially they receive a lump sum or monthly payments out of the homes equity. There are other key benefits with reverse mortgages, such as the ability for a homeowner to eliminate making mortgage payments, as the loan interest is deferred on the back end of the mortgage. A key benefit to the home owner is that if they borrow more money that the homes ultimate selling value they, or their heirs are not responsible for paying the lender back the difference. Lenders do not require minimum credit scores or income to qualify, but finding a lender who offers a reverse mortgage may take some homework as not all lenders offer this specialty loan program.