Retired seniors with mortgage debt face a difficult situation. Monthly mortgage payments contribute to high monthly living costs which can put limitations on the lifestyles of seniors who are living on a fixed income.
If you are looking for a way to pay off your existing mortgage to free up cash, you may be eligible to get a reverse mortgage loan to leverage your home’s equity and pay off your existing mortgage.2 Reverse mortgages, unlike forward mortgages, do not require monthly mortgage payments for as long as you live in the home as your primary residence, maintain it in accordance with HUD guidelines, and pay your property taxes and homeowner’s insurance.1
By using a reverse mortgage to pay off your existing mortgage, you can eliminate a portion of your monthly expenses and have peace of mind knowing that you will not miss payments if an unexpected expense arises. You are also free to use the extra cash that would otherwise go towards your mortgage payment however you choose.
Borrowers with substantial equity in their home may be eligible to receive additional funds after paying off their mortgage. These funds can be paid out in three different ways:
1) A line of credit that will grow over time3 and can be accessed anytime extra funds are needed
2) A lump sum4 payment to be used to pay down other debts5 or renovate your house
3) Monthly payments to help further increase your monthly cash flow, or a combination of these payment methods can also be set up to help you meet your financial goals.
If you are a senior homeowner with an existing mortgage looking for a way to increase your monthly cash flow, a reverse mortgage may be an option for converting your home equity into the funds you need. To learn more or request a free eligibility assessment, contact a licensed loan advisor at 1 (800)976-6211 or click here to request a call back.
1 You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.
2 Your current mortgage(s) and any other existing liens against the property, must be paid off at or before closing.
3 The reverse mortgage loan balance grows at the same rate as the available line of credit. Line of credit growth occurs and is only a benefit when a portion of the line of credit is not used. The unused line of credit grows over time and more funds become available during the life of the loan.
4 The funds available to the borrower may be restricted for the first 12 months after loan closing, due to HECM reverse mortgage requirements. In addition, the borrower may need to set aside additional funds from the loan proceeds to pay for taxes and insurance.
5 Your HECM loan will accrue interest that together with principal will have to be repaid when the loan becomes due.