The most popular reverse mortgage program in America is the US government sponsored FHA Home Equity Conversion Mortgage (HECM). The HECM program serves the needs of most homeowners quite well. However, in certain instances, such as higher value properties, second homes or co-op units in New York City, a variety of other reverse mortgage programs better suit the situation. We provide those programs as well.
A reverse mortgage enables older homeowners (62 or older) to convert part of the equity in their homes into tax-free cash without having to sell the home, give up title, or take on a new monthly mortgage payment. There are no income or credit requirements.
For most people, a large portion of their wealth is the built up equity in their homes. Until the advent of reverse mortgages, there were only two ways for a homeowner to reach that valuable equity. You could sell and move, an expense and lifestyle choice that most people don’t like. Or, if you qualified for a loan, you could borrow against your home with an ordinary loan. But, that involves making mandatory monthly payments to the lender – a major risk for people of retirement age and an option most people find unattractive.
A reverse mortgage is a great way for you to turn an idle asset – your home – into a valuable financial tool that you can use today and in the future – without taking on new risks. With a reverse mortgage you don’t pay, you receive. A line of credit is established for you to draw upon in any way you choose. Or, you can arrange for a scheduled monthly income supplement – or both.
It’s called a reverse mortgage because the flow of payments is reversed from an ordinary mortgage. Cash is advanced to you to use as you see fit. Repayment is not required for as long as you live in your home – no matter how long that may be!
The number of people taking advantage of reverse mortgage programs has exploded in recent years. In fact, it’s grown tenfold over the past five alone! Reverse mortgages have provided new financial opportunities to hundreds of thousands of older homeowners nationwide. Perhaps a reverse mortgage will for you too!