Reverse Mortgages Provide Additional Income, Security for Seniors

From Staff Writers

According to the Administration on Aging, one-third of Americans age 65 and over depend on Social Security benefits for approximately 90 percent of their income. However, senior homeowners have an opportunity to live a more comfortable and financially independent lifestyle by securing a reverse mortgage on their home. A reverse mortgage is one option for seniors that can help them achieve financial goals that wouldn’t otherwise be possible.

What is a Reverse Mortgage?

A reverse mortgage is a loan that allows seniors to convert the equity in their homes into income. The borrower retains the title of the home, while receiving either a monthly installment or a lump sum of money borrowed against their home. The money can be used for almost anything, including: paying medical bills or prescription drug costs, funding in-home care services, home repairs or remodeling, travel or paying off a current debt or mortgage.

Who is Eligible for a Reverse Mortgage?

Homeowners aged 62 years or older are eligible for this loan. Qualifications such as income, credit or health are not taken into consideration. Seniors currently paying off a first or second mortgage also may be eligible.

Reverse Mortgage Fast Facts

• Money can be advanced to the borrower in monthly allotments or as a lump sum.
  
  
• All borrowers must be 62 years and older.
  
  
• No income or credit qualifications.
  
  
• No monthly mortgage payments, borrower is responsible for property tax, insurance and any other obligations.
  
  
• The money is tax-free - consult your financial advisor.
  
  
• You will never owe more than the current market value of your home upon repayment of the loan.
  
  
• Remain in your home and retain home ownership.
  
  
• No repayment is made until the home is sold or the owner permanently moves out or passes away, unless the borrower chooses to pay down the loan.
  
  
• Social Security benefits and Medicare are generally not affected by a reverse mortgage – consult your financial advisor or the appropriate government agencies.
  
  
• Recipients of state benefits such as Medicaid and S.S.I. should consult state agencies and financial advisors to determine potential impact.
  
  
• Closing costs and fees incurred can be financed as part of the loan.

How Much Money Can I Receive?  

The borrower’s age, the value of the home and the current equity in the home are just a few of the determining factors of much how money the homeowner will receive. Generally, the older the borrower is and the higher the appraised value of the home, the more money he or she is eligible to receive. To get a better idea of how much equity a reverse mortgage may be able to produce for your particular situation, try the National Reverse Mortgage Lenders Association’s reverse mortgage calculator at http://nrmla.edthosting.com.

What’s the Next Step?

Additional information regarding reverse mortgages is available through financial advisors or the AARP. If you are considering a reverse mortgage, be sure to make informed decisions. Shop around and get as much information as you can before talking to a lender. This is a relatively new line within the mortgage industry, so you are well advised to work with a group with a proven track record. For example, a company called Financial Freedom Senior Funding Corporation services more reverse mortgages than any other company in the country, and offers a complete range of reverse mortgage products. They can be reached at 800-301-6171.

Right at Home is a national organization dedicated to improving the quality of life for those we serve. We fulfill that mission through a dedicated network of locally owned providers of in-home care and assistance services.