A reverse mortgage is a home loan option that allows eligible homeowners to turn part of their home equity into cash. Instead of making monthly mortgage payments, the loan balance is typically repaid when the homeowner sells the home, moves out permanently, or no longer meets the loan requirements.
Reverse mortgages are most commonly used by homeowners age 62 or older who want to access home equity while continuing to live in their home.
How a Reverse Mortgage Works
With a reverse mortgage, you keep ownership of your home. The loan balance grows over time as interest and fees are added to the amount borrowed.
Funds may be used for many needs, such as:
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Living expenses
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Paying off an existing mortgage
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Medical or healthcare costs
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Home repairs or improvements
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Additional retirement income
Homeowners are still responsible for property taxes, homeowners insurance, HOA dues if applicable, and maintaining the home.
homeowners explore reverse mortgage options in the states where its loan officers are properly licensed.
Who May Qualify?
To qualify for a reverse mortgage, homeowners generally must:
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Be age 62 or older
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Live in the home as their primary residence
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Own the home or have enough equity
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Complete required reverse mortgage counseling
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Stay current on property taxes, insurance, and property upkeep
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Meet property and program requirements
Final eligibility depends on the homeowner, property, equity, loan program, and lender guidelines.
Is a Reverse Mortgage Right for You?
A reverse mortgage may be a helpful option for homeowners who want to access equity without selling their home. It may provide extra financial flexibility during retirement. However, it is not the right fit for everyone. A reverse mortgage can reduce the amount of equity left in the home and may affect long-term financial or estate plans. The Premier Lending Team can help explain how reverse mortgages work, review available options, and help you decide whether this type of loan makes sense for your situation.