Are you a potential client for a reverse mortgage?
Don’t know what a reverse mortgage is? You’re not alone. A reverse mortgage is a relatively new product designed for people over 62. It has only been available to Texans since 2001. A reverse mortgage is a way to tap into the equity in your home and provide you with the money you want. It was originally designed for families who are real estate rich but cash poor. But, you don’t have to be cash poor to take advantage of a reverse mortgage.
How does a reverse mortgage work?
Individuals over 62 years of age can obtain a loan for approximately 40% – 70% of the appraised value of their home. Past or present credit problems are never an issue, as the senior never has to pay the loan back in their lifetime. The lender provides money to the senior in the form of a loan. The senior makes no payments. The loan only becomes due and payable when the last surviving spouse dies or moves permanently out of the home.
Are there restrictions on what I can use the money for?
There are no restrictions on the use of money. You can use it to pay for daily living expenses or a dream vacation. You can improve your lifestyle or buy a car or finance a grandchild’s college education. The money is yours to be used as you please.
How do I get the money?
It’s kind of like the lottery. You can opt for a lump sum payment, monthly payments, or a combination of the two.
When is the loan repaid?
The loan becomes due and payable when the last surviving spouse dies or moves permanently out of the home. You can live in a nursing home or similar facility for up to one year before your loan will have to be repaid.
How is the loan repaid?
The heirs can sell the home and pay off the loan with the proceeds of the home sale. The original loan amount plus the accrued interest is all that is owed.