Whats A Reverse Mortgage

Whats A Reverse Mortgage

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A Home Equity Conversion Mortgage, or HECM, is a flexible financial product designed for homeowners aged 62 and older. With a HECM, also known as a reverse mortgage, you can convert some of the equity in your home into cash to meet financial goals, such as supplementing retirement income; buying a new home; maintaining a quality lifestyle; or preparing for a more secure and rewarding financial future.

And that happens all without giving up ownership or control of your home and without having to make monthly mortgage payments. Of

course, as homeowners, you are responsible for occupying the home as your primary residence, keeping up with property maintenance, and staying current on paying property taxes, required insurance and any homeowners’ fees.

Instead of repaying the loan in monthly installments, you or your estate repay the principal, accrued fees and interest when you no longer live in the home.

When it comes to getting your cash, you determine how you’d like to receive your funds based on your individual financial needs and objectives. For example:

  • A monthly payment will supplement your income each month.

  • A lump sum will provide your available funds at once, subject to initial disbursement limits.

  • A line of credit will allow you to withdraw cash as you need it.

  • Any combination of the above will give you the added value of flexibility to meet your personal financial requirements.

No matter how you choose to have the funds paid to you, your loan proceeds are tax free. It is recommended that you consult your tax advisor for full details about your individual tax situation.

Benefits of a reverse mortgage

For many homeowners aged 62 and over, a Home Equity Conversion Mortgage, or reverse mortgage, could be the most effective way to turn the equity you have in your home into funds you can use. Take a look at these benefits:

  • You continue to live in and own the home … as long as you occupy the home as your primary residence, keep up with property maintenance, and stay current on paying your property taxes, required insurance and any homeowners’ fees.

  • Your loan proceeds are tax free. Talk to your tax specialist for information about your situation.

  • You can use the funds for anything you want: meet short-term financial goals; maintain a quality lifestyle; prepare for a more rewarding retirement; pay unexpected medical bills; upgrade appliances; or do home renovations … things you may never have imagined you could do before.

  • Without compromising your Social Security or Medicare benefits, you can enjoy greater financial flexibility. Typically, your Social Security, Medicare and pension benefits will not be affected, because a Home Equity Conversion Mortgage is considered to be “loan proceeds” and not income. However, Medicaid, Supplemental Security Income (SSI) and other needs-based programs, which vary from state to state, may be impacted. It is recommended that you consult with a benefits professional to get complete details regarding your situation.

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Eligibility for a Reverse Mortgage

To be eligible for a Home Equity Conversion Mortgage (HECM) loan, all borrowers must be at least 62 or older. The home must be owned free and clear, or all existing liens and mandatory obligations must be satisfied. Borrowers must own the home, occupy it as their primary residence, keep up with property maintenance, and stay current on paying property taxes, required insurance, and any homeowners’ fees.

For more information give me a call so I can link you up with a loan specialist for a (no obligation) consultation

Blog submitted by: Ron Cooks of The Real Estate Marketplace – Servicing the Greater Fort Hood area which includes:Killeen, Harker Heights, Temple, Belton, Copperas Cove and Nolanville. Feel free to call Ron(254) 702-0064 if you have any questions regarding Central Texas Real Estate.

For Real Estate Listings in Central Texas visit my website at: www.MyKilleenHome.com or if you’re on the go text  'Ron' to 254-227-5799

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Phone: 254-702-0064
Dated: April 25th 2016
Views: 327
About Ron: I’m a retired Army Warrant Officer that served our nation for 25 years. I was born and reared in ...

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