Reverse Mortgage

If you are 62 years of age or older and have considerable equity in your home or have paid it off completely, you may be able to convert that asset into income you can enjoy during retirement.

The FHA’s Home Equity Conversion Mortgage (HECM), also known as the reverse mortgage program, enables you to withdraw some of the equity in your home and is designed with seniors in mind. Payments are made to you and,  as long as you continue to live in the home, the loan never has to be repaid.

Whether you want to pay off your current mortgage, get out of foreclosure, finance a home improvement, supplement your retirement income, pay for healthcare expenses, or even purchase another home, you may want to consider a reverse mortgage.

Core Mortgage Financial specializes in reverse mortgages in Estero and throughout Florida. Our licensed loan originators understand their complexities and can help you evaluate the pros and cons of these loans for your situation.

How does a reverse mortgage work? Instead of continuing to make your monthly mortgage payments and increase the equity in your home, the reverse mortgage lender makes funds available to you in the form of a lump sum, monthly payments, or a line of credit you can use as needed.  The mortgage is paid off when you pass away, permanently move out of the home, or sell the property. Any remaining equity in the home belongs to you or your heirs.

Know the Facts about Reverse Mortgages

Reverse mortgages are also known as Home Equity Conversion Mortgages (HECMs), and they have become increasingly popular in recent years. They can be a useful financial tool for older homeowners, but too much misinformation can result in poor decisions. Here are some important facts to know about reverse mortgages.

  • You may apply for an FHA reverse mortgage regardless of whether or not you purchased your home with an FHA-insured mortgage.
  • A reverse mortgage is based only on your home’s equity and age. There are no income or credit score requirements to qualify for a reverse mortgage.
  • To be eligible for the FHA reverse mortgage, your home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.
  • To qualify for a reverse mortgage, you do not have to own the home free and clear or have a lot of equity. However, there must be enough equity to pay off current liens and/or mortgages.
  • A reverse mortgage does not mean that the lender or bank will own your home. A reverse mortgage is simply a lien against your property. You will own the home and keep the title as long as you continue to live in the home, pay the insurance and property taxes, and maintain the home in good repair.
  • When you have a reverse mortgage, you can stay in the home as long as it is your primary residence or, in the case of a couple, as long as one borrower is still in the home as their primary residence. The due date on the reverse mortgage is the youngest borrower’s 150th birthday.
  • Reverse mortgage borrowers must pay an upfront FHA mortgage insurance premium. This ensures that, when the loan becomes due and payable, you (or your heirs) don’t have to repay more than the value of the home, even if the amount due is greater than the appraised value.
  • A reverse mortgage is a loan and is not considered income, so Social Security and Medicare benefits are not affected.

Reverse mortgages are best used as part of a sound retirement plan, and not when there is a pending crisis. As with anything else in life, there are unscrupulous people who take advantage of consumers every day. The goal of the Core Mortgage is here to help you make the most out of your retirement. We can help you decide which reverse mortgage program will work best for your situation.

Core Mortgage Financial is dedicated to meeting the home financing needs of all Florida home buyers. Call us 24/7 at (855) 554-CORE or (239) 514-2674 to find out more about reverse mortgages, or use our online form to inquire about an Estero Reverse Mortgage.

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