Reverse Mortgage

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If you’re 62 or older, you can take out a reverse mortgage to turn the equity you have in your primary residence into a steady stream of income for you in your retirement years. Every year, thousands of senior citizens turn to lenders to open reverse mortgages so they can supplement their retirement income, take bucket list vacations, upgrade their homes, and more!

What is a Reverse Mortgage?

With a typical mortgage, your lender holds a note for the balance you owe on your home, plus interest. Every month, you pay a monthly mortgage payment to your lender, which consists of both principal and interest payments.

A reverse mortgage is entirely different! Your lender does an appraisal on your home to determine its current market value. They then subtract any principal balance you may still have on your home as well as determines a residual amount of equity for you to maintain. Finally, the lender sends you either a lump-sum payment or sets up monthly payments to pay you back from the equity you already own in your home! With a reverse mortgage, you can keep your home for the rest of your life, so long as it remains to be your primary residence.

Reverse Mortgage Costs

While reverse mortgages pay you from the equity in your home, you will pay some upfront costs to open the loan. These include:

  • Loan origination fees
  • Closing costs
  • Mortgage insurance premiums (for Home Equity Conversion Mortgages)
The Three Types of Reverse Mortgages

There are three types of reverse mortgages available in the US. They are:

  • Single-purpose Reverse Mortgages
    These types of reverse mortgages are only available in certain states and municipalities. They are a limited type of reverse mortgage, in which you must sign that the funds received are being used for a single purpose such as home improvements, paying property taxes, or making necessary home repairs.
  • Proprietary Reverse Mortgages
    These reverse mortgages, which are backed by the banks that issue them, allow the funds received to be used for anything you desire. This is the type of reverse mortgage many seniors get to supplement their income in their retirement years.
  • Home Equity Conversion Mortgages (HECMs)
    This type of reverse mortgage is backed by the United States Department of Housing and Urban Development (HUD). Like proprietary reverse mortgages, the funds received can be used for anything you desire. The difference is since these loans are backed by HUD, it may be easier for you to qualify for one.
Get Started on Opening Up a Reverse Mortgage Today

You’ve taken the first step to educating yourself about reverse mortgages by reading this page. Now, it’s time to make the next move and get connected with a lender who can explain what you qualify for and how each option you qualify for will work for you.

We’ve made it easy for you to find a qualified, knowledgeable lender for your reverse mortgage. Simply go to our free quote page to get matched with lenders today!



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