Seniors have long expressed their desire to stay in their homes as they age, with more than 90% not wanting to have to move into a nursing home or long-term care facility.1 With COVID-19 having infiltrated group living situations and accounting for more than a third of coronavirus deaths2, the need for seniors to stay in their homes is now in great demand.
If you are planning to age in place, your home equity may be able to help you find the financial stability you need.
Accessing your home equity can help you:
- Eliminate your monthly mortgage payment3
- Pay for in-home medical care
- Make improvements and repairs to your home
- Stretch your retirement savings
A reverse mortgage loan allows qualified homeowners, who are 62 or older, access to a portion of their home’s equity as cash. Borrowers do not have to repay the loan as long as they continue to live in the home as their primary residence, pay property taxes and insurance, and maintain the property according to the Federal Housing Administration (FHA) requirements.4 Funds can be used to cover daily expenses, medical bills, or even long-term care.
Borrowers can select to receive their funds3 in flexible disbursement options that can be used immediately:
- A line of credit that will grow over time5 and can be accessed on an as-needed basis
- A lump-sum of cash at closing (only available on fixed-rate loans)
- Tenure – monthly payments for the life of the loan
- Term – monthly payments for a specific number of years
If you’re interested in learning how much you may be able to receive from a reverse mortgage, call 1-800-976-6211 to speak with a licensed loan officer.
Disclosures:
1 https://www.aarp.org/money/budgeting-saving/info-2017/costs-of-aging-in-place.html
2 https://www.nytimes.com/interactive/2020/us/coronavirus-nursing-homes.html
3 Your current mortgage(s) and any other existing liens against the property must be paid off at or before closing. 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.
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. The borrower must live in the home as their 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.
5 The reverse mortgage loan balance grows at the same rate as the available line of credit. The 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.