New legislation now allows a reverse mortgage to be used to purchase a home. It works similarly to a conventional, “forward” mortgage, but can provide a better option for your clients 62 years or older because there are no monthly mortgage payments. With a reverse mortgage, your client makes a down payment on the home and borrows the remaining money from a lender. But, unlike a conventional mortgage, with a reverse mortgage, the client is not required to make any monthly mortgage payments. Instead, the loan balance increases over time and is eventually paid off when the homeowner sells the home or passes away. Of course, the client may, at any time, choose to make payments and reduce the loan balance similarly to a conventional, “forward” mortgage.

A reverse mortgage is an excellent choice for your client 62 years or older who wishes to purchase a home, move closer to family, or move into a senior community. A reverse mortgage provides options for clients who do not want to make monthly mortgage payments, but do not have enough money to pay cash or are concerned about depleting their cash reserves. For example, a client could sell their current home and use the proceeds from the sale as a down payment on an existing condo in a senior community. If your client is unable to pay for the condo in full, with a reverse mortgage, your client could still move comfortably into their home without a monthly mortgage payment.

A Reverse Mortgage Specialist can quickly provide you with an estimated loan amount.

Reverse Mortgage Eligibility Requirements

To qualify for a reverse mortgage, all persons that will be on the deed must be 62 years of age or older and the home to be purchased with the reverse mortgage must be the primary residence. Reverse mortgages are available on many different types of homes, including single-family, townhomes, and some condos. There are no income or credit score requirements. The loan to value of the reverse mortgage is determined by the borrower’s age, the interest rate, and the home value. Generally, the older the borrower and the lower the interest rate, the more money is available from the reverse mortgage.

The Benefits of a Reverse Mortgage

A reverse mortgage can offer many benefits to your clients 62 years or older that are not all available with a conventional, “forward” mortgage.

• No repayment required as long as your client lives in their home.
  
  
• It is safe – A reverse mortgage is insured by the Federal Government.
  
  
• Your client is protected in case of housing market declines.
  
  
• Your client has the option to pay some or all of the reverse mortgage balance at any time without penalty.  The client can choose to make payments or choose not to make payments as circumstances change.
  
  
• Your client retains full ownership of their home.

Your Reverse Mortgage Specialist at Retirement Life Funding can work with you to determine how a reverse mortgage could work for your clients.

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