Reverse Mortgages are available to anyone who is over 62 years of age, owns their home and uses it as their primary residence. It is a very good option if you need cash and want to stay in your home for as long as possible.
In a nutshell, Reverse Mortgages work by allowing borrowers to swap the equity in their homes for cash, while still owning and living in the house. Currently, the only place to secure this type of financing is through the Federal Housing Administration’s Home-Equity Conversion Mortgage program, or HECM. The HECM loan limit is currently $625,500, and there are many things that will determine how much a borrower will qualify for. Some of these things are the age of the borrower, current interest rates and the property’s value.
If you do qualify, you have several choices on how to receive your money. You can be paid a lump sum up front, opt for a monthly cash payment, or choose a combination of the two. The only downside to Reverse Mortgages are the fees. They are high, ranging from $7,000 to $20,000. You will also have to pay an origination fee and an insurance premium. On the upside, this insurance does guarantee that your total debt can never be more than the home’s value.
For more information and a list of brokers go to ReverseMortgage.org.
