The monthly mortgage payment is eliminated2
If there is a conventional mortgage on the home, replacing it with a reverse mortgage loan can eliminate the borrower’s monthly mortgage payment.2 It may increase cash flow and provide more options for managing finances during retirement.
Access to funds and ability to age in place
For older adults who want to stay in their homes, also known as aging in place, and need an additional source of funds, a reverse mortgage may be able to help. The borrower can use the funds from a reverse mortgage any way they want, including making modifications to help make aging in place more comfortable.
The proceeds from a reverse mortgage can be used to pay down high-interest debts such as credit card debt or a car loan.3 This is another way that a reverse mortgage may increase cash flow.
Supplement retirement income
What if retirement savings are falling short of covering expenses? A reverse mortgage may be able to provide some help. The term and tenure options allow borrowers to receive reverse mortgage payments in the form of monthly payments.
Put aside as an emergency fund
If an unexpected expense arises, you may be wondering how you will pay for it. A reverse mortgage line of credit may be an option. A line of credit grows over time,4 and is available when needed. You only pay interest on the portion you withdraw.
Call (800) 976-6211 to speak with a licensed loan advisor to learn more about the benefits of a reverse mortgage.
2Your 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.
3 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 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.