Reverse Mortgage Basics
A reverse mortgage is a loan that enables homeowners 62 and over to convert part of the equity in their homes, without having to sell the home, give up the title or take on a new monthly mortgage payment (principal & interest). It provides funds to help pay for the things you want or need, while you continue to live in and own your home.
Minimum Requirements
Payment Options
You can choose to take your funds as:
Reverse Mortgage Line of Credit Option
This option is growing in popularity as it offers certain advantages as compared to a traditional Home Equity Line of Credit (HELOC),
A reverse mortgage is a loan that enables homeowners 62 and over to convert part of the equity in their homes, without having to sell the home, give up the title or take on a new monthly mortgage payment (principal & interest). It provides funds to help pay for the things you want or need, while you continue to live in and own your home.
Minimum Requirements
- Age 62 or older
- Own and live in your home
- Home must be your principal residence, and meet HUD guidelines
- Complete HECM counseling session
Payment Options
You can choose to take your funds as:
- A Line of Credit
- Monthly payments
- Upfront Cash
- Any combination of the above
Reverse Mortgage Line of Credit Option
This option is growing in popularity as it offers certain advantages as compared to a traditional Home Equity Line of Credit (HELOC),
Feature |
Traditional HELOC |
Reverse Mortgage Line of Credit |
Borrower retains home ownership * |
X |
X |
No monthly principal and interest payments required * |
X |
|
Line of credit growth ** |
X |
|
Use of credit cannot be reduced or revoked by the lender, as long as you meet all your obligations under the loan |
X |
* Borrower is responsible for property taxes, homeowners insurance, and property maintenance. A reverse mortgage is a home-secured debt payable upon default or maturity event.
** With a Reverse Mortgage Line of Credit, the amount available to the borrower can increase over time. The growth applies to the unused funds remaining in the borrower's credit line. The less the borrower takes out up front, the more will be available later.
Uses
You may use the loan proceeds anyway you want.
HECM for Purchase
HECM for Purchase is a financing option specifically for home buyers who are age 62 and older. It may help you get the funds you need to buy the home you want.
It enables you to purchase a home by combining a one-time investment of funds with loan proceeds from a HECM to complete the transaction. The home you are purchasing secures the loan.
** With a Reverse Mortgage Line of Credit, the amount available to the borrower can increase over time. The growth applies to the unused funds remaining in the borrower's credit line. The less the borrower takes out up front, the more will be available later.
Uses
You may use the loan proceeds anyway you want.
- An alternative to a Home Equity Line of Credit (HELOC)
- Supplement your retirement income to help preserve your savings
- Pay off your existing mortgage to free up more cash each month
- Cover unplanned expenses
- Health care costs
- Renovate or upgrade your home
- Buy an automobile or other major purchases
HECM for Purchase
HECM for Purchase is a financing option specifically for home buyers who are age 62 and older. It may help you get the funds you need to buy the home you want.
It enables you to purchase a home by combining a one-time investment of funds with loan proceeds from a HECM to complete the transaction. The home you are purchasing secures the loan.
HECM FOR PURCHASE HIGHLIGHTS
WHAT
WHO
WHY
For the loan to remain in good standing, the borrower must continue to keep current with property-related taxes, insurance and upkeep. |
Counseling
Reverse Mortgage counseling is required before an appraisal can be ordered. I will furnish a list of approved HECM counseling agencies located in SC as well as agencies that offer telephone counseling. Reverse Mortgage Timeline 1961-- The first reverse mortgage was closed in Maine 1987-- Congress passed a reverse mortgage pilot program called the Home Equity Conversion Mortgage (HECM) Demonstration 1988-- President Reagan signs the reverse mortgage HECM bill into law. 50 lenders chosen by lottery to participate 1989-- The first FHA-insured Home Equity Conversion Mortgage (HECM) is issued. 1998-- HECM becomes permanent. 2009-- The HECM for Purchase program is introduced HECM loan limit increased to $625,500 2015-- Financial Assessment begins. |
Please call me if you are seeking a Reverse Mortgage lender serving Charleston, SC. I have been a Reverse Mortgage Consultant based in South Carolina for over 13 years and can help simplify the entire loan process. I work for the Reverse Mortgage Division of Cardinal Financial in Summerville, and can meet in the convenience of your home. Get your information from an experienced Reverse Mortgage specialist who can answer all your questions and make a Reverse Mortgage easy to understand.
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George Stewart
Reverse Mortgage Consultant NMLS 506558 (843) 771-3677 Office |
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Copyright © 2023 by George Stewart
All rights reserved. The author is solely responsible for this content and is not affiliated with or acting on behalf of any government agency.
All rights reserved. The author is solely responsible for this content and is not affiliated with or acting on behalf of any government agency.
This material is not from, approved, or issued by the FHA, HUD, or any government agency. The content on these pages is for informational purposes only and is subject to change without notice. Please consult a professional for tax or financial advice.
A reverse mortgage is a home loan and not a government benefit. The borrowers must continue to own and occupy the property as the primary residence and are responsible for paying property taxes, homeowner's insurance, and property maintenance.
A reverse mortgage is a rising debt, falling equity loan. Negative amortization causes the loan balance to increase as accrued interest and fees are added. Failure to comply with the terms and conditions of the loan could trigger a loan default that results in foreclosure.
Subject to underwriting approval. Application is required and not all applicants will be approved. Full documentation and property insurance required. Loan secured by a lien against your property. Fees and charges apply and may vary by product and state. Terms, conditions and restrictions apply.
A reverse mortgage is a home loan and not a government benefit. The borrowers must continue to own and occupy the property as the primary residence and are responsible for paying property taxes, homeowner's insurance, and property maintenance.
A reverse mortgage is a rising debt, falling equity loan. Negative amortization causes the loan balance to increase as accrued interest and fees are added. Failure to comply with the terms and conditions of the loan could trigger a loan default that results in foreclosure.
Subject to underwriting approval. Application is required and not all applicants will be approved. Full documentation and property insurance required. Loan secured by a lien against your property. Fees and charges apply and may vary by product and state. Terms, conditions and restrictions apply.