Unlock The Equity in Your Home— and Use It As Cash— With a Reverse Mortgage

• A reverse mortgage is a safe and easy way for seniors to turn their home’s equity into an additional source of income to meet any financial need
• It is a loan that is available to senior homeowners who are at least 62 years of age
• Unlike traditional home equity loans or conventional forward mortgages, this product does not require repayment of any kind until the home is sold, or the borrower permanently leaves their primary residence

• Borrowers need to be at least 62 years of age
• Own (or are purchasing) their home, and live there as their primary residence (there can be mortgage(s) and/or lien(s) on the house)
• Financial Assessment review

• Lump Sum
• Monthly (Tenure) Payments – for Life of Loan
• Term Payments – for specific period of time
• Line of Credit – with growth
• Modified Tenure – Combination of monthly payment and line of credit

No. Reverse mortgage borrowers may use the proceeds for whatever they wish. It is
non-taxable and does not impact social security payments. Proceeds from a reverse mortgage are not considered as income or an asset, so it should not impact any other benefits that are income or asset-based.  However, it is always recommended that you consult with a  financial advisor, attorney and/or tax advisor:

• Pay off debt, including mortgage and credit cards to eliminate monthly payments
• Make needed home repairs/improvements
• Pay property taxes and homeowner’s insurance
• Pay for home healthcare
• Cover medical and prescription costs
• Pay for energy costs
• Pay for short term and long term healthcare
• Purchase a vehicle
• Avoid foreclosure
• Purchase a new home to improve living circumstance (i.e. move closer to family or obtain one-level living)
• Replace the amount of money that was being received by a spouse that has passed away (i.e. elimination of a pension or social security upon death)
• Make additional retirement investments
• Leisure – Travel or help grandchild(ren) with college expenses
• Supplement income to reduce/eliminate the need of taking money too quickly from retirement/investment accounts.

• Unlocks the equity built into the home, allowing seniors to supplement their retirement income so they can enjoy greater financial security and maintain their independence while being able to stay in their home for life
• No repayment until the home is sold or the borrower permanently leaves the residence
• Unlike a home equity loan or credit card, there are no income, asset or credit qualifications. There is, however, a financial assessment that is done to evaluate the borrower(s) willingness and capacity in order to be sure they are able to continue paying for property expenses.
• Credit standards are flexible and handled case-by-case so if someone has fallen behind on bills, they may still be eligible.
• Proceeds received as tax-free income (always consult your tax advisor)
• Interest is paid at the time the loan is repaid – not during the loan
• FHA Insured (on traditional HECM products)
• Flexible cash advance options
• Growth on credit line
• No debt passes to heirs

How much a borrower acquires from the reverse mortgage depends upon:

• Age (of the youngest borrower)
• Current interest rates
• The value of the home

Reverse mortgages are a very safe option for senior homeowners.

• Borrower(s) name remains on title
• No matter what happens in the economy, how much money a borrower receives, or how long the borrower lives in the home, there is never a monthly mortgage payment required
• Debt owed on the loan does not pass to heirs
• Borrower will never owe more than the loan balance or value of property, whichever is less (in an arms-length real estate transaction)
• Strictly regulated by government agencies
• Closely monitored by industry associations like AARP and NRMLA (National Reverse Mortgage Lenders Association)

There are several misperceptions surrounding the reverse mortgage program.

• “The lender takes the home” – this is incorrect. A homeowner retains full ownership and the reverse mortgage is a lien.
• “I can be thrown out of my home” – this is untrue. A homeowner can stay in their home for as long as they wish. A lien is placed on the property, just as it would be with a regular forward mortgage or home equity loan, which is paid off when the home is sold (or paid by another means if the borrowers or heirs wish to retain the property). As long as the homeowner continues to pay their taxes and homeowner’s insurance and maintains the property, a homeowner can stay in their home for as long as they wish.
• “I can owe more than my home is worth” – the homeowner will not owe more than the value of their home

• Attend a required counseling session (generally by phone)
• Maintain property in reasonably good condition
• Continue to pay taxes and insurance on property
• Occupy the property as a primary residence

• Single Family Residence
• Planned Unit Development (PUD)
• 1-4 unit Property, as long as borrower occupies 1 unit
• Condominium (FHA approved)

• When the property is sold, no borrower has resided in the property for a period of 12 months, or the last remaining borrower has passed away.
• When the borrower does not meet the terms of the loan (for example, they discontinue paying taxes and insurance owed on the property).
• Options are to pay off the reverse mortgage (money drawn plus accrued interest and mortgage insurance) and retain ownership (either the borrower or heirs), or give up ownership by selling the home and receive the difference between the net sales proceeds and the loan balance. If there is a shortfall, the insurance will cover the difference.

• Age minimum 62
• No shared appreciation with the lender
• No monthly payment is required
• No principal repaid until the client no longer permanently occupies the property
• Client retains title to the property
• When sold profit goes to client or estate; if loss, no deficiency
• No restrictions on the use of the money
• Income, employment, assets and credit stated but not used in underwriting like it is on a forward mortgage or home equity loan
• Non-recourse loan – No additional debt left to heirs