Reverse Mortgage: How does it work?
A reverse mortgage is similar to other types of loans. However, there is one main difference: Instead of paying the lender, the lender pays you. There are several options for how a homeowner receives payments. You can choose to take your proceeds as a line of credit; monthly advances for a set period; a monthly stream of funds for as long as you live in your home; a lump sum; or a combination of these options.
Many retirees are not prepared for income loss or an increase in spending. The reverse mortgage was created to provide greater flexibility in diversifying seniors' income and assets by allowing them access to the hard-earned equity built up in their homes. For many seniors, a reverse mortgage line of credit can be the difference between financial hardship or staying comfortable in your home.
Reverse Mortgage Facts:
- Available to homeowners who are at least 62 years old
- The loan does not need to be repaid until you sell, die, or move out
- Provides the ability to use your home equity to help you maintain a more comfortable standard of living
- No monthly mortgage payments are required. If you qualify and have an existing mortgage, home equity loan, or any other type of debt, you can pay it off and reduce your monthly expenses. Or, if you own your home free-and-clear, you can access additional funds with no minimum monthly repayment required. (As the homeowner, you are responsible for paying property taxes, homeowners insurance, and HOA dues if applicable).
- The home must be a primary residence.
- Access to funds for travel, healthcare-related expenses, or to supplement income
When it comes to reverse mortgage financing, you should consult with a qualified mortgage professional. There are eligibility requirements that outline who can take advantage of the program and how much money you can receive. To learn more or see if reverse mortgage financing is the right option for you, please contact David Puzniak, NMLS #559106 First Integrity's Reverse Mortgage Specialist at (314) 878-7900.
At First Integrity Mortgage Services, we specialize in finding the best home loan program for your unique situation.