Senior Citizens

If you are 62 and older you may qualify for a reverse mortgage loan

Contact David Blatt today to see if you qualify!

Understanding Your Options: Reverse Mortgages Explained

HECM Reverse Mortgages: A Helping Hand for Seniors

Did you know there’s a government-backed loan option called a Home Equity Conversion Mortgage (HECM), often referred to as a “reverse mortgage”? Backed by the Department of Housing and Urban Development (HUD), HECMs can help eligible homeowners 62 and older improve their cash flow during retirement.

For high-value properties exceeding $1 million, private “jumbo” reverse mortgages might be available in your area. These are not FHA-insured and their terms vary by lender.

Qualifying for a Reverse Mortgage

The eligibility requirements for a reverse mortgage are straightforward:

• Be at least 62 years old.
• Own your home with sufficient equity to cover any existing balances.
• Occupy the property as your primary residence.
• Meet minimal income and credit score standards.

Imagine the freedom of living in your home without a traditional monthly mortgage payment. With a reverse mortgage, you can potentially access a portion of your home’s value, offering financial flexibility during your retirement years.

Benefits of a Reverse Mortgage

• Retain Ownership and Title: A reverse mortgage allows you to stay in your home and keep the title.
• Unlock Your Home’s Equity: You can tap into the equity you’ve built up over the years, potentially improving your financial security.
• FHA Insured Peace of Mind: HECM reverse mortgages are insured by the Federal Housing Administration (FHA), providing additional security. Your home itself is the only asset securing the loan.

Repaying a Reverse Mortgage

There’s no need to repay the loan until you move out, sell the house, or pass away. However, your heirs will have options to keep the home:

• Repay the Loan Balance: They can pay off the outstanding loan amount.
• Pay Market Value: They can choose to pay 95% of the appraised home value, minus closing costs and realtor commissions.

Maintaining Your Homeownership

To remain in your home, you’ll need to:

• Keep Up with Property Taxes and Insurance: Ensuring your property taxes and homeowner’s insurance are current is crucial to avoid triggering loan maturity.
• Maintain Your Property: Basic upkeep of your home is required by the loan terms.

Required Counseling

Before taking out a reverse mortgage, HUD mandates counseling from an independent, third-party counselor approved by HUD. This ensures you fully understand the program and its implications.

Tax Considerations

While proceeds from a reverse mortgage aren’t subject to income tax, it’s advisable to consult a tax advisor. They can explain how the loan might affect government needs-based programs like Medicaid and Medi-Cal.

Key Points to Remember

• Reverse mortgages are specialized loans for seniors 62 and older.
• They provide access to a portion of your home’s equity.
• You retain ownership of your home.
• Seek tax advice on potential impacts to government programs.
• This is not a free grant, but a loan repaid when you move, sell, or pass away.
• Counseling is mandatory before incurring any loan costs.
• The loan is secured by your home, and non-compliance could lead to foreclosure.

We are not mortgage lenders, but brokers who connect you with third-party lenders for HECM reverse mortgages.

By understanding these details, you can make an informed decision about whether a reverse mortgage is the right fit for your financial situation.