This information is simply to help you understand the basic principles of obtaining a reverse mortgage. You may be a graduate from Harvard, and not understand the basics of a reverse mortgage which is completely normal. There are thousands of websites providing different information and some are hard to understand. Below are bare minimum facts, but will help lead you in the right direction and provide a stepping stone to ask the more important questions.
- Reverse Mortgages are a loan against your home. Fortunately it’s a loan that never will have to be repaid, until you refinance, sell the property, or you are deceased.
- The equity in your home is turned into liquid cash. You are able to use the majority of your equity to enjoy the things you love to do and not stress about making a car payment or simple utility bills on a fixed income
- Whoever you decide to pass your home down to will not inherit the debt. If your home loan balance is over the value of the home, then they are only responsible for paying the amount the home is currently worth. The lender and FHA will eat the remaining balance.
- Seniors fear the most of getting kicked out of their home. As long as you pay your taxes and keep insurance up to date you will live in that home, mortgage payment free.
Keep in mind that the HECM program is backed by the federal government. You as a senior are protected by laws far more strict then an individual obtaining a traditional mortgage. Please contact your loan specialist for additional information.