Three Reverse Mortgage Questions to Consider

More information about reverse mortgages:

What is a Reverse Mortgage?

A reverse mortgage is designed to allow homeowners age 62 and older to draw on the equity in their homes by lump sum, monthly installments or by periodically drawing from a line of credit. Reverse mortgages were created in order to provide a means for homeowners to remain in their homes as long as they desire to do so and to provide a financial resource that can be used for any purpose. The reason this type of mortgage is called a “reverse mortgage” is because, rather than making monthly payments as with a traditional mortgage, the interest owed accumulates over time and is eventually repaid when the home is sold.

Why should I get a Reverse Mortgage?

The decision to get a reverse mortgage is a big step that should be carefully evaluated.  The process should start with the homeowner making an assessment of financial needs and resources. Among other things, the following factors should be considered:

  • Estimated time that homeowner plans to remain in the home
  • Current and expected monthly income from Social Security, pension, IRA distributions, interest/dividends, etc.
  • Current and expected monthly expenses, such as property taxes, home and auto insurance, home health care, food and utilities, entertainment and transportation, etc.
  • Major anticipated expenses, such as travel, home repair, financial assistance to children and grandchildren

You can use the financial assessment worksheet on this website to estimate your financial needs. You can also view the Why are reverse mortgages recommended for additional considerations that may apply to you.

Typically those who benefit most from a reverse mortgage are those who plan to stay in their homes over an extended period and have built a substantial amount of equity in their homes. Because the cost to obtain a reverse mortgage is greater than the cost to obtain a traditional mortgage, it is best to have the reverse mortgage for a longer period to justify the cost.

Our reverse mortgage professionals can assist you to make sure that all important factors are considered as you make this important financial decision. They will also perform an analysis of the benefit available to you from a reverse mortgage using software created for this purpose. You can provide information on the Reverse Calculator page of this website to receive this complimentary analysis.

How do I qualify for a Reverse Mortgage?

If you own your home and are 62 years of age or older you are eligible for a reverse mortgage.

Your home must be your primary residence and may be a single family home, 2-4 unit property or condominium. The available equity you can receive, and the means of doing so, are determined based on your age, the value of your home, the amount you now owe on your home, and other factors. Because this calculation is very complex, software is used to calculate the benefits and alternative ways of receiving them.

We can help you figure out if you're eligible for a reverse mortgage. Call us today! If you're ready to get started on a reverse mortgage apply now!

 

Holmgren and Associates

DBA of Finance of America
1900 Mountain Boulevard
Oakland, California 94611
Phone: 510-339-2121
NMLS 0910184/1071
 

Holmgren & Associates is a branch of Finance of America. We are a full service mortgage banker with an experienced staff offering expertise in residential mortgage lending, with primary focus on loans for home purchase, refinance, and reverse mortgages.

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