Reverse Mortgages
A Home Equity Conversion Mortgage (HECM), or more commonly know as a Reverse Mortgage, is the powerful refinancing tool for adults 62 years old or older who own their home. A Reverse Mortgage can be an addition to your retirement income, support Aging in Place, cover Health Care Cost, and even help you Purchase a New Home.
Support your Retirement Income with a Reverse Mortgage
Use Your Homes Equity to:
- Pay off existing mortgage, monthly bills to increase cash flow
- Replace taxable withdraws from 401(k) or other retirement plans with tax-free reverse mortgage proceeds
- Take that dream vacation
- Establish a line of credit for emergencies or occasional expenses
- Help a child or grandchild with major expenses like a down payment on a home or college tuition
Age in Place with a Reverse Mortgage
Use Your Home Equity to:
- Eliminate your monthly mortgage payment while retaining ownership of your home
- Make needed home repairs or modifications to live more comfortably
- Fund short-term or long-term in-home health care
- Have a line-or credit for emergencies or occasional expenses.
Cover your Health Care Cost with a Reverse Mortgage
Use Your Home Equity to:
- Cover personal care at home on a short or long-term basis
- Cover large medical bills
- Make home modifications for safety and accessibility
- Secure quality medical equipment necessary for your comfort
- Purchase vehicle modifications for the mobility impaired
Purchase a New Home with a Reverse Mortgage
Use Your Home Equity to:
- Purchase a home with no monthly mortgage payments
- Downsize, upsize, move closer to family, or finally buy your dream home
- Preserve more savings and retirement assets
- Improve cash flow for unexpected expenses or new adventures
Key Advantages to any Reverse Mortgage
- With a Reverse Mortgage Line of Credit, the unused amount in your credit line actually grows over time giving you access to more available funds.
- No monthly payment is required with a Reverse Mortgage. However, it has a flexible repayment feature: you decide how much or how little to pay each month toward principle and interest if you so choose.
- A Reverse Mortgage cannot be canceled or reduced, as long as you meet your ongoing obligations and live in the home as your primary residence.
- With an FHA-insured Reverse Mortgage, you are not responsible to pay the difference if the loan balance ever exceeds the value of your home when the loan becomes due.
Frequently asked questions about Reverse Mortgages
What is a Reverse Mortgage?
A Reverse Mortgage or Home Equity Conversion Mortgage (HECM) is a loan insured by the Federal Housing Administration (FHA) for homeowners age 62+.
What are the basic requirements to secure a Reverse Mortgage?
You may be eligible for a Reverse Mortgage if you are at least 62 years old, own and have sufficient equity in your home, and live in the home as your primary residence.
What if I still owe money on a first or second mortgage?
Proceeds from your Reverse Mortgage would first be used to pay off any existing mortgage(s). This means the balance of your existing mortgage(s) would be added to the balance of your Reverse Mortgage.
How much money can I get?
The specific amount depends on several factors, including your age, the type of Reverse Mortgage you select, the value of your home, prevailing interest rates and FHA lending limits.
How can I receive the funds from a Reverse Mortgage?
You can take your funds as a lump sum, line of credit, monthly advances, or any combination of these.
Will a Reverse Mortgage affect my government benefits?
The funds from a Reverse Mortgage generally do not affect regular Social Security or Medicare benefits. However, needs-based benefits such as Medicaid and Supplemental Security Income (SSI), may be impacted. We can provide additional general information, but you should contact a government benefits specialist about your particular situation. Visit www.ssa.gov.
How can I use the proceeds?
You can use the proceeds however you chose.
Will I have to pay any fees?
With the exception of a fee for government-required HECM counseling, most of the fees associated with a HECM can be financed with your loan so there is no immediate out-of-pocket expense. The costs are added to the loan amount and paid along with the accrued interest when the loan becomes due.
When does the loan become due?
There are a few "trigger events" that will cause the loan to become due. The loan is only due when you move out permanently, sell the home, or pass away.
What has to be repaid when the loan becomes due?
You'll repay the loan balance, any fees that have been added, and the accrued interest. Homeowners (or their heirs) usually choose to do this through the sale of the home. Repaying the loan with other assets or by refinancing through a conventional mortgage is also an option, if you or your heirs want to keep the home.
What are the ongoing obligations of a Reverse Mortgage borrower?
Borrowers are required to occupy the home as their primary residence, keep the property in good repair and pay property taxes, homeowners insurance, and any other property charges such as HOA dues or flood insurance.
Call Tim today to start your Reverse Mortgage
Tim Murphy
Mortgage Loan Originator
NMLS# 1508452
(843)471-1740
Tim@TheMortgageCompany.info
The Mortgage Company, Inc., DBA The Mortgage Company of SC, NMLS# 1508607 (www.nmlsconsumeraccess.org), 2411 N Oak Street, Suite 301-J, Myrtle Beach, SC, 29577, 843-471-1740, is a South Carolina Mortgage Broker, License #MB1621000. Licensed by the South Carolina Department of Consumer Affairs, 2221 Devine Street, Columbia, SC 29205, 800-922-1594. This is not a commitment to lend or extend credit. All loans, credit and collateral are subject to approval. Restrictions and conditions may apply. Terms, rates, data, programs, information are subject to change without notice, and may not be available in all areas.
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