Reverse Mortgage

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A reverse mortgage allows homeowners 62 years and older with significant home equity to borrow against the value of their home to provide greater financial flexibility.

What is a Reverse Mortgage?

A reverse mortgage is a home-secured loan that can turn part of the investment you’ve built up in your house into funds that you can use today. You may receive the funds as fixed monthly payments, or as a line of credit that will be available when you need it.

How Does a Reverse Mortgage Work?

A reverse mortgage provides the homeowner with payments using the home as collateral and by borrowing against the value of the house. Your existing remaining mortgage balance will become due when you permanently move away, sell the home, or pass away. The most common type of reverse mortgage is called a Home Equity Conversion Mortgage(HECM) and is federally subsidized by the U.S. Department of Housing and Urban Development (HUD).

Why Get a Reverse Mortgage?

According to the NRMLA, homeowners 62 and older in the United States held $6.2 Trillion in home equity at the end of Q1 2018. There is a lot of untapped capital for retirement-age adults in the U.S. To access this home equity, owners can either sell their home or borrow against it. A cash-out refinance can be a right solution, but monthly payments may become a burden to pay back during retirement. Rather than refinancing or selling your home and incurring all the hassles of moving, borrowers over the age of 62 with significant equity in their homes can apply for a reverse mortgage.

Benefits of a Reverse Mortgage

  • Consolidate debt
  • Potentially gain more financial flexibility and control
  • Pay for large purchases, like a new automobile
  • Fund home renovations and repairs
  • Establish a standby line of credit you can access as needed
  • Buy a home with the available funds