Reverse Mortgages

One great thing about turning age 62 and owning a home is to be able to use the equity in one’s residence as a financial cushion.  Called a “Reverse Mortgage” or “Home Equity Conversion Mortgage (‘HECM’)”, a reverse mortgage makes available an amount of the equity as cash without any required principal or interest payments.  All that is required is to properly insure the property, pay the property taxes, keep the property maintained, and remain in the property as a primary residence.

Amount of cash that is initially made depends upon the youngest age of the applicants at the residence.  Since a HECM is a mortgage and interest is charged but no principal and interest payments are required, interest on cash used accrues against the property.  In the case of a young resident, it is likely more interest will accrue, possibly exceeding the value of the property.  This impact is lessened by making less cash available.  Counterbalancing this is that the cash available may increase with time.

Both Fixed-Rate and Adjustable-Rate mortgages are available.  A Fixed-Rate mortgage makes a one-time cash out possible without future draws.  The Adjustable-Rate mortgage allows several different options.

A reverse mortgage may be used to purchase a new residence.  The principal  balance available can be used to offset the cash required to close.  If a residence is sold to purchase a home this way, this cash difference can come from the cash received from the sale leaving the remaining cash to be used for any purpose desired.

We are able to provide reverse mortgages for one to four family single family residences, townhouses, and condominiums.  There may be some restrictions, though, on townhouses and condominiums.  Please contact us if you are interested in a reverse mortgage or have any questions about reverse mortgages.