Benefits of a Reverse Mortgage
There are many benefits to a reverse mortgage, which can be tailored to suit the homeowner’s needs or wants.
Homeowners should discuss their particular situation with a reverse mortgage consultant.
Here are a few of the advantages of a reverse mortgage, across the board:
- No monthly payments. The loan is repaid by the sale or refinancing of the
home. - The infusion of money from a reverse mortgage is tax-free income and can be
spent in any way the homeowners choose. - Qualifying is based on the borrower’s age, current interest rates and the
value of the home, not the homeowner’s credit or employment status. - Fees may be financed as part of the mortgage. The borrower incurs little
out-of-pocket expenses to obtain the reverse mortgage. - No maturity date. A reverse mortgage becomes due when the borrower sells the
home or permanently moves out of the home. A reverse mortgage can also
become due if the borrower does not maintain their property taxes, homeowners
insurance or reasonable maintenance of the property. - No prepayment penalty for FHA-insured HECM loans. These loans can be
partially or fully paid off at any time with no additional fees or costs. - Asset protection: At the end of the reverse mortgage, the amount that must
be paid is the sum of the actual funds received or advanced for fees, plus
accrued interest. The repayment amount will never exceed the value of the home,
as long as the property is sold to pay back the reverse mortgage.