Reverse Mortgages

  • Do you want to stay in your home for many years?
  • Have you accumulated substantial equity in your home?
  • Are you (or your co-borrower) at least 62 years of age?

If you answered “yes” to any of these questions, a reverse mortgage (also known as a Home Equity Conversion Mortgage or HECM) might be right for you! A reverse mortgage can be a smart financial option for seniors who want to gain access to the equity in their home.

Reverse Mortgage Features

  • Fixed and variable loan rates available.
  • Most closing costs and fees can be financed as part of the loan, resulting in little or no up front fees1
  • Receive your funds in a lump sum2, a regular monthly payment, a credit line, or a combination of these options
  • Eliminates existing monthly mortgage payments3
  • Allows you to stay in your home and maintain the title3
  • Your heirs inherit any remaining equity after paying off the HECM loan
  • Federal Housing Administration (FHA) insured HECM Loan Program4
  • Loan proceeds are not taxed as income or otherwise (though you must continue to pay required property taxes)5

How a Conventional Fixed-Rate Mortgage Works

  • Amount available is based on the age of the youngest borrower, current interest rates, existing
    mortgage amount, and the lesser of the appraised value of your home, or sale price up to the maximum lending limit.
  • The funds available to you may be restricted for the first 12 months after loan closing, due to
    HECM requirements. You may need to set aside additional funds from loan proceeds to pay for
    taxes and insurance. Consult your advisor for detailed program terms.
  • Your actual payment will vary based on your financial situation and the current interest rates when you apply.
  • Property must be a single family residence, an owner occupied 2-4 unit home, a condominium
    approved by the Department of Housing and Urban Development (HUD), or a manufactured
    home that meets FHA guidelines
  • Must meet financial assessment requirements as established by HUD

             

Ready to Talk About Your Mortgage?

       

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1 Except for HUD required counseling.

2 Only available on fixed-rate loans

3 Your current mortgage, if any, must be paid off using the proceeds from your HECM loan. You must still live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.

4 As required by the Federal Housing Administration (FHA), you will be charged an up-front mortgage insurance premium (MIP) at closing and, over the life of the loan, you will be charged an annual MIP based on the loan balance.

5 Generally, money received is not considered income and should be tax free, though you must continue to pay required property taxes. Consult your financial advisor and appropriate government agencies for any effect on taxes or government benefits.