Reverse Mortgages
Basics
A reverse mortgage enables
older homeowners (62+) to convert part of their
equity in their homes into tax-free income without
having to sell their home, give up title, or take on
a new monthly mortgage payment.
Borrowers are approved for a
loan in the amount of a percentage of the present
value of their home, usually around 50%. With
this money, a borrower must first pay off any
existing mortgages on the house. After the
existing mortgages are paid off, the borrower is
paid the rest of the loan amount and is free to use
this money in any way they wish. The payout is
TAX FREE!
Furthermore, a reverse
mortgage is a negative amortization loan.
Instead of the loan reducing in value over time as
the borrower makes monthly payments, the borrower
makes no monthly payments and the amount owed grows.
A reverse mortgage:
-
Provides easy access to
the equity you have built in your home
-
Delivers increased
tax-free monthly income (consult your tax
advisor)
-
Eliminates monthly
mortgage payments
-
Provides funds to
improve your quality of life
-
Allows the homeowner to
live in their home
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