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A reverse mortgage is a federally regulated program that allows seniors (age 62 and older) to convert a portion of their home equity into tax-free income, without having to sell their home, give up the title, or take on a new monthly payment. Borrowers choose to receive the mortgage funds as a lump sum, line of credit, monthly income, or any combination.
Benefits of a Reverse Mortgage
- Seniors do not have to leave their homes
- No income, medical, or credit qualifications
- No monthly mortgage payments
- Loan proceeds can be used to pay for health care, home-based care, repairs, vacations, home purchases, or anything else
- The loan does not have to be repaid until the homeowner moves out permanently or sells the home
- All loan proceeds are tax-free
Qualifications
- Individuals on title must be at least 62 years of age
- The home must be a 1-4 unit family residence
- Most condos and PUDs are acceptable
- Manufactured homes are accepted on an approved FHA foundation
- Borrower must own and occupy the home as a primary residence
- Any existing mortgage must be paid off
- Mandatory counseling is required by a HUD approved housing counselor
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Reverse Mortgage Consumer Safeguards
- Government approved independent counseling is required. An approved counselor will review the transaction, answer any questions about reverse mortgages, and suggest alternative options.
- There are limits on interest rates and loan costs.
- There is a cap on the repayment, so that seniors or thier heirs will never owe more than the home is worth.
- Advanced disclosure fully informs borrowers of the costs associated with a reverse mortgage transaction.
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Bay Area Reverse Mortgage
2080 Mountain Boulevard
Oakland, CA 94611
Office: 888-691-8113 Fax: 510-463-0146
E-mail: tami@seniorequitybenefits.com
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