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Other Learning Resources
Access Reverse Mortgage has compiled some valuable learning resources below to help those interested in exploring a reverse mortgage. Our teams of Reverse Mortgage Specialists are available to answer any questions you may have and to provide you a complimentary analysis of a reverse mortgage customized to your personal circumstances.
What is a Reverse Mortgage, and how does it work?
Let’s start with the basics. The federally insured Home Equity Conversion Mortgage was instituted in 1989. FHA and Fannie Mae wanted to give senior homeowners a way to receive additional income by giving them access to the equity in their homes without the burden of making monthly mortgage payments. (It is important to remember that while no monthly principal and interest payment may be required, you are still responsible for paying your property taxes, insurance, any applicable assocation fees or ground rents, and maintaining the home. Failure to do so will result in foreclosure.) They looked to AARP for input as they designed the program to make sure the needs of seniors were addressed. The result is one of the safest and most flexible finance options available for seniors today.
The FHA Reverse Mortgage is federally-insured. It allows seniors over the age of 62 to borrow against the equity in their home. Funds from a reverse mortgage are considered loan proceeds, and are not taxable. They can be used for any purpose that you wish. Often our clients use the available funds to pay off an existing mortgage, freeing up that monthly payment for other uses. Many also use the available funds to supplement their Social Security and pension incomes, for medical expenses, travel, home repairs and ever-increasing property taxes or insurance bills. We also have seen many clients use the reverse mortgage as an emergency line-of credit that they can access in times of uncertainty or financial hardship.
The reverse mortgage has many similarities to a traditional home equity loan. Remember, when you are getting a reverse mortgage that you are not giving up title or ownership in your home. You cannot lose your home under normal circumstances, but please understand foreclosure may occur if you do not pay your taxes and insurance and otherwise comply with the loan terms. You’ll receive a statement on a regular basis, and instead of writing a check to reduce your principle each month or quarter, you’ll see that the interest accrued has simply been added to the balance owed. If you ever wish to move or sell the home you’ll be responsible for repaying the amount borrowed, plus any interest and fees charged on the loan out of the sale proceeds. You will receive any remaining equity in your home, just like when you sell a home with a traditional mortgage.
Download, print and read our FREE EBOOK with more information about reverse mortgages, and see how others in your situation are using them to increase their cash flow in retirement. Our eBook is a great first step for exploring the opportunities available through reverse mortgages. – DOWNLOAD EBOOK
The Center for Retirement Research at Boston College has developed an excellent guide to accessing your home equity. This detailed guide includes useful information and graphics that compare the available options, including a comparison of reverse mortgages and more traditional home equity lines of credit. You can download a copy by visiting their website, or request a physical copy be mailed to you right away. – DOWNLOAD EBOOK
The Joint Center for Housing Studies of Harvard University released a report titled “Housing America’s Older Adults”. This report includes detailed information about housing options for America’s older adults including how reverse mortgages can be used as a financial vehicle for housing after retirement. – VISIT WEBSITE
The well-known Journal of Financial Planning has published several studies and reports recently that discuss the use of reverse mortgages in a variety of situations. One such report is titled Retirement Trends, Current Monetary Policy, and the Reverse Mortgage Market. This report discusses some of the trends for retiree financing, including a rise in the use of reverse mortgages. – VISIT WEBSITE
The Consumer Financial Protection Bureau (CFPB) has published an eBook to help consumers better understand reverse mortgages. You can read or download this eBook directly from the CFPB’s website with more information about reverse mortgages. – SEE EBOOK
These materials are not from HUD or FHA and were not approved by HUD or a government agency.