Reverse Mortgages

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• A reverse mortgage is a specialized mortgage that may allow eligible older homeowners to convert a portion of their home equity into loan proceeds while continuing to own and occupy their home, provided applicable loan obligations are satisfied.
• One common type is the federally insured Home Equity Conversion Mortgage (HECM).

• Unlike a traditional mortgage where the borrower generally makes monthly principal and interest payments to reduce the balance, a reverse mortgage allows eligible borrowers to receive loan proceeds in permitted forms.
• Interest and applicable charges are added to the loan balance over time, meaning the amount owed generally increases rather than decreases.

A reverse mortgage does not mean the homeowner no longer has housing expenses or responsibilities.

Borrowers must continue meeting applicable obligations, which generally include:

• Property taxes
• Homeowners insurance
• Property maintenance
• Occupancy requirements

Failure to satisfy loan requirements can result in the loan becoming due and payable.

HECM borrowers must satisfy applicable age, property, financial assessment and occupancy requirements and generally must complete counseling with an approved independent housing counselor.

No... Home equity, future housing plans, costs, inheritance considerations and alternative financial options should all be carefully evaluated before proceeding.

We can help explain how reverse mortgage financing works, answer your initial questions and help you determine whether it's an option worth exploring.