Reverse Mortgages - A Tool for Retirement

With the cost of living rising and people living longer…. Retiring is a big decision. People ask…..

Will I outlive my income?

Will my retirement be comfortable?

Can I afford to keep my home?

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What is a Reverse Mortgage?

Consider a Reverse Mortgage

If you own your own home and are at least 62 years of age, a reverse mortgage provides an opportunity to convert some of your home equity into cash. In the most basic terms, a reverse mortgage allows you to take out a loan against the equity in your home where you do not have to repay the loan during your lifetime as long as you are living in the home and have not sold it. If you want to increase the amount of money available to fund your retirement, but do not like the idea of making payments on a loan, a reverse mortgage is an option worth considering. However, there are also some risks, costs, and pitfalls to be aware of.

A reverse mortgage allows older homeowners to convert their home equity value into cash.

Several types of reverse mortgages exist, optimized for different purposes or goals.

There are also several different options for how to receive the money from the reverse mortgage.


Benefits of a Reverse Mortgage Loan

A reverse mortgage loan may help you enjoy financial security and peace of mind, and allow you to remain in your home during your retirement years.You have the freedom to use the net proceeds however you deem necessary.  For example, you can use your proceeds to:

Supplement your retirement income

Consolidate debt

Pay for medical care, prescription drugs and in-home care

Cover large or unexpected expenses

Make home improvements

Travel to visit family and friends or take vacations

Gifts for the children/grandchildren

Live a more comfortable lifestyle

Eligibility Requirements

Some of the key eligibility requirements for a reverse mortgage loan are:

All owners on title must be age 62 or older

The home must be your principal residence

You must have sufficient equity in your home

You must meet financial eligibility criteria as established by HUD

You must complete a HUD-approved counseling session

Your home must be a single-family residence, a two-to-four unit owner-occupied home, a condominium or a manufactured home

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There are many misconceptions about reverse mortgages so these booklets below may answer your family’s questions.

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Developing Your Reverse Mortgage Retirement Plan

by Integrity Mortgage Solutions

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Reverse Mortgage Self-Evaluation

by National Reverse Mortgage Lenders Association

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What Do I Do When My Loan is Due?

by National Reverse Mortgage Lenders Association

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What You Need to Know About Your HECM After Closing

by National Reverse Mortgage Lenders Association


Pros and Cons

Rising property values have created the largest asset owned by families.This nest egg for homeowners….could only be accessed through a loan and years of payments …or a sale.Now you can have the best of both worlds….without a sale and no payments.Decisions Decisions….


Delay retirement or return to work


Your continue earning income to pay for your financial obligations


You may be unable or unwilling to continue working because of poor health or other reasons

Sell your house and downsize

You eliminate or reduce your current mortgage payment and maintenance.

You may want to stay in your current home. You may still have a mortgage. Closing costs add to your financial burden.

Obtain a home equity loan or refinance your existing mortgage

You remain in your home. You may e able to lower your monthly mortgage payments and even pay off other debts.

You must still pay your monthly mortgage, plus closing costs for the equity loan.

Decrease expenses and modify your lifestyle

You eliminate unnecesary expenses and reduce your monthly cash outflow.

It may be difficult to cut back if you are already living frugally, or you may not want to sacrifice some comforts.

Obtain a Home Equity Conversion Mortgage (HECM)

You remain in your home. You eliminate your monthly mortgage payment and may have additional fund for expenses or financial goals.

The loan balance grows over time and the value of your estate may decrease over time. Closing costs add to your financial burden

Reverse Mortgage FAQ

Obtaining a reverse mortgage loan is a big decision. It’s normal for you and your family to have questions and hopefully the answers below can help put your mind at ease.