A reverse mortgage is a unique tool designed for individuals 62 and older as an innovative financial planning strategy. Imagine enjoying monthly loan proceeds from the years you’ve invested in your home without the obligation of a monthly mortgage payment.
There are many benefits of a reverse mortgage but one of the most notable might be the pleasure of accessing part of the equity in your home and having the comfort of remaining in the home you have come to know and love for many years.
A reverse mortgage is available on primary residences and no repayment is due until the home is sold, or the last borrower passes away or permanently leaves the home. Because there are no required mortgage payments on a reverse mortgage, the interest is added to the loan balance each month.
Proceeds from a reverse mortgage are not subject to personal income taxation, but borrowers should seek tax advice on how proceeds may affect government needs-based programs such as Medicaid and Medicare.
Borrowers must continue to keep the home in good condition, pay property taxes and continuing to pay homeowner’s insurance to avoid the loan becoming due and payable.
One important factor to keep in mind is that the borrowers of a reverse mortgage retain ownership and title to their home. For homeowners taking advantage of a reverse mortgage who have been building up equity in their home for years, their home will remain theirs just as it was before.
Certain restrictions and qualification criteria apply. Contact your loan officer for more details.