A reverse mortgage is a loan for seniors age 62 and older. HECM reverse mortgage loans are insured by the Federal Housing Administration and allow homeowners to convert their home equity into cash with no monthly mortgage payments.
Factors that influence reverse mortgage loan amount
Age (or the age of the youngest spouse in the case of couples).
Value of home.
Lesser of appraised value or the Federal Housing Administration’s HECM mortgage limit of $636,150.
Can afford the cost of maintaining their home?
Trash service. Water and sewer bills. Gutter cleaning. Termite treatment. Pest control. Power-washing. Replacing the siding, windows, roof, fascia, rotted joists, appliances, floorboards, drywall holes. HVAC tune-ups. Reinforcing a crumbling foundation.
The list goes on …
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Do you need to unlock a supplemental income?
You can use a reverse mortgage to eliminate their existing mortgage and improve your monthly cash flow.
Don’t plan to move?
The reverse mortgage allows you to stay in your home until the last borrower on the loan (or under the current guidelines, a qualified spouse who is under the age of 62 at the time the loan is obtained and is recognized as a Non-borrowing spouse) permanently leaves the residence.