Reverse mortgage loans for seniors is a solution that converts your home equity into a monthly or lump sum payment. These loans allow seniors to increase their monthly income or preserve their financial legacy. Home Equity Conversion Mortgage, also known as HECM, borrowers do not have to repay the loan until the borrowers are no longer in their home.
Common Reverse Mortgage Questions
Are there special requirements?
To be eligible for an HECM loan, the homeowner must be 62 years of age or older, own the home or have a low balance on the existing mortgage. The home must be used as the primary residence for the borrower, and must not be delinquent on any federal debt. Additionally, borrowers must receive counseling from an agency that is HUD approved.
What if there is an existing mortgage on the home?
As mentioned previously, there can be an existing mortgage on the borrower’s home, however the balance must be low enough to be paid off with funds from the reverse mortgage loan.
Will the borrower lose any government assistance?
Government assistance, social security or retirement will not be effected by an HECM loan. Many seniors will use the additional income for necessities, small family trips or simply for savings.
What are the payment options?
With a reverse mortgage loan there are many payment options for the borrower.
- Equal monthly payments as long as one of the borrowers continues to live in the home.
- Equal monthly payments for a fixed period of time.
- A line of credit with unscheduled payments with the amount the borrower needs until the line of credit is exhausted.
- A combination of monthly payments and a line of credit.
- A lump sum; all funds go to the borrower at closing.
What happens when the borrower vacates the home?
An HECM loan is a lien on the property; when the borrower vacates the home, it will then be sold and the loan will be paid off. The remaining funds from the sale will either go to the borrower, the spouse, or heirs.
What if the borrower changes their mind?
The borrower has three calendar days from closing to cancel the loan. The borrower needs to be sure to ask their lender for instructions on this process prior or at closing. It is important the borrower has all of the phone numbers, names, fax numbers addresses and written instructions for the cancellation of the reverse mortgage loan.
Get Started With Seniors Reverse
If you have any questions on a reverse mortgage loan, if it would work for you or if you qualify, please feel free to call Seniors Reverse Mortgage at 800-561-1552. Our team of professionals will be able to answer any question you may have. We are licensed in Florida and Alabama, serving many seniors from Mobile to Tallahassee. There is no need to drive to our office, we can come directly to you and speak to you about the HECM process in the comfort of your own home.