Reverse Mortgage Basics

Reverse mortgage loans have been in the public marketplace for over 20 years. It is a financial product for seniors to use in their retirement years. Quite simply, it is a senior converting the equity of their home into a payment stream.

Basics

• Must be at least 62 years old

• Must be a homeowner with a limited mortgage balance or none at all

• Home types, single-family or 2/4-family, town-homes, condominiums, and manufactured homes.

• No credit or income qualifications

• Senior maintains ownership of the home

• Must continue to pay the property taxes, homeowners insurance and maintain the upkeep of the home

• Can never owe more than the home’s value

• Repayment of the loan when the senior leaves the home

• Family heirs may either sell the home or refinance the home in their name

Red Star Points

• A reverse mortgage is best suited for seniors that need; additional monthly income, want to eliminate debt, purchase long term health care or plan to invest financially or provide to their children.

• A senior should plan on living in the home for a minimum of 3 years for a reverse mortgage to be cost effective.

• A reverse mortgage loan is not for everyone especially if a senior has adequate retirement income, sound estate planning and limited expenses.