Are you looking to add some extra income to your life? Do you have a lot of equity in your home? A reverse mortgage can help you get money out of your home that you can enjoy today. Depending on your circumstances, a reverse mortgage may be a great choice giving you supplemental income for the rest of your life. To determine how much you may be eligible for use our reverse mortgage calculator.
41% of people aged 55 to 64 don’t have any retirement savings at all
Most people get a type of reverse mortgage that’s called a Home Equity Conversion Mortgage (HECM), and is backed by the US government. You have to meet some specific criteria in order to qualify for this type of mortgage. It’s pretty simple, really.
Reverse mortgages can be a great option for seniors with specific economic circumstances while other seniors might do better with another solution. Everyone is different so it’s important to consider the key factors before delving in.
For example, what if you die and your spouse is not listed as a borrower, or has not yet reached the age of 62?
The good news is that under new laws, the surviving spouse is now able to stay in the home for the rest of their life if they choose – even if they are younger than 62. That’s because the loan amount is actually based on the age of the younger spouse even if they are not on the loan itself. This way, if the spouse on the loan passes away, the remaining spouse may stay in the home and enjoy the remaining income without fear of foreclosure.
If don’t plan on staying in your home for a long time, be sure to take a look at the loan origination costs. Those costs are paid upfront and can be costly. So if you think you may relocate, downsize or head to a nursing home in just a few years, you’ll want to consider whether these fees makes sense in the long run.
The minimum fee for HECM is $2500 with an overall cap of $6000. Other fees include appraisal, and other closing costs such as title search and insurance, surveys, inspections and recording fees. For more specific fee details, talk to your lender.
The difference between the fair market value of an asset (like a home) and the amount of debt against that asset (like a mortgage balance).
It depends. If you need to go a nursing home for a short time (anything less than 12 months), you can return to your home. If, however, you make a permanent move (longer than 12 months) to a nursing home, you most likely will have to sell your home to pay off the reverse loan.