What is a Reverse Mortgage?
What is a Reverse Mortgage?
A reverse mortgage is a loan for senior homeowners that allows borrowers to access a portion of the home’s equity and uses the home as collateral. The loan generally does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time, the estate has approximately 6 months to repay the balance of the reverse mortgage or sell the home to pay off the balance.
After the sale of the home all of the remaining equity will be inherited by the estate. If the home sells for less than the balance owed on the reverse mortgage, the estate will not be personally liable.
How are the funds distributed from a Reverse Mortgage?
A borrower can receive the proceeds from a reverse mortgage in the following ways:
- Lump sum – a lump sum of cash at closing. (only available for fixed-rate loans)
- Line of Credit – draw any amount at any time until the line of credit is exhausted.
- Tenure – equal monthly payments as long as the homeowner lives in the home.
- Term – equal monthly payments for a fixed period of time.
- Any combination of the above options
HECM for Purchase
What is HECM for Purchase?
A Home Equity Conversion Mortgage (HECM) for Purchase is a reverse mortgage that allows seniors, age 62 or older, to purchase a new principal residence using loan proceeds from the reverse mortgage.
Like all reverse mortgage loans, you will not have to make monthly payments on the HECM for Purchase loan. You will still need to fulfill the reverse mortgage requirements, such as living in the home as your principal residence, keeping the home in good condition, and paying your property taxes and homeowners/flood insurance premiums on time.
Loan Products & Programs
There are many factors to consider before deciding whether a HECM is right for you. There are HECM counselors available to discuss all the program eligibility requirements, financial implications and alternatives available to aid in obtaining a HECM. Counselors can also help explain the process as well as discuss provisions for the mortgage becoming due and payable. Upon the completion of the HECM counseling, you should be able to make an independent, informed decision of whether this product will meet your specific needs.
About
I became a licensed mortgage professional in 1982. With over 40 years of experience, I bring a very personal and professional level of expertise, to those I serve.
Approximately 15 years ago my passion took a new direction, as my career became focused on assisting the senior segment of our industry as they approached, or were already in, the retirement portion of their lives. I learned, through a very personal experience, that the gift of the "longer life spans" can sometimes be a "double edged sword". I began devoting my career to helping seniors with reverse mortgages.
As a nationally known speaker and published author, I have performed education classes for more than 20,000 financial planners, independent financial advisors, long term care insurance agents, attorneys and Realtors on the topic of The Use of Home Equity During Retirement. Over the last decade, I have appeared on hundreds of national, local and regional television, and radio broadcasts. My articles, on the topic of Reverse Mortgages, have appeared in the a variety of industry leading publications and blogs.
At 64 years old, with 3 children and 4 grandchildren, (and 40 years of experience), I hope to help as many of my clients truly enjoy the retirement they have worked so hard for, and truly deserve!
Contact Us
Mike Banner NMLS ID: 386692
727-224-3859
Hours
Monday - Friday: 9am - 7pm
Saturday: By appointment
Sunday: By appointment
