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Reverse Mortgage

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What is a Reverse Mortgage?

Reverse Mortgage programs are special types of mortgage loans that enable you, as an older homeowner, 62 years of age or older, to tap into the equity you have in your home while giving you the maximum amount of flexibility to address your particular financial needs or desires.  You may choose a lump sum payment to pay off debt, fix up your home or other expenses.  You may wish to receive regular monthly payments to supplement your income or a line of credit that you can tap into at any time.  You may be able to combine the cash, monthly payment or credit line options if that fits your needs.

How is a Reverse Mortgage different from traditional financing?

Unlike traditional home equity lines, no repayment of the HECM mortgage is required until you no longer occupy the home as your principal residence.  At that time, the loan becomes due and payable.

With a Reverse Mortgage, you borrow against the equity of your home, and receive loan proceeds according to the payment plan that you select.  These plans are described on the following pages.  As a borrower, you may change payment plans as many times as you wish, unless you take the full amount available in a lump sum at closing.

What happens to my home when I’m gone?

When you sell your home or vacate it for other reasons, the accrued interest plus what the lender has paid to you or on your behalf through the years is due and payable, usually out of the proceeds from the sale of your home.

Any proceeds in excess of the amount owed on the loan belong to you or your estate.

Can I be forced to sell or vacate my home if the money I owe on the loan ever exceeds the value of my home?

Absolutely not, as long as you continue to occupy the property as your principal residence.  You cannot be forced to sell or vacate the property, even if the total amount you owe on this loan exceeds the value of the property; or if the fixed term over which you received monthly payments has expired.  No deficiency judgment may result from your loan.   FHA insurance covers any further obligation to the lender.

Will I still have an estate that I can leave to my heirs?

Upon your passing, the loan balance consisting of principal paid to you or on your behalf, plus any accrued interest, becomes due and payable.  Your estate may choose to repay the loan by selling the property or they may want to pay it off by other means so they can keep the home.  If the loan should exceed the value of your property, your estate will owe no more than the value of the property; the mortgage insurance will cover any balance due to the lender.  No additional financial claims may be made against your heirs or estate. You will never owe more than your property is worth!

What to expect as a Reverse Mortgage Borrower:

If you are considering a Reverse Mortgage in Yuma AZ, I have a dedicated team who specializes in this process.  We will make sure you know exactly what you are getting yourself into, and are comfortable every step of the way.  This is a big decision, and we never do anything until you are 100% happy with the loan.

Below are a few helpful links to get you started in the right direction if you are looking for a reverse mortgage.

Reverse Mortgage Purchase

Buy a Home with No Mortgage Payments

NCOA Book

Reverse Mortgage for estate planning

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