• Toni F. Ryan

Is a Reverse Mortgage Right For Me?



Have you asked yourself this question? The Home Equity Conversion Mortgage (HECM) is FHA's reverse mortgage program. This plan enables a homeowner 62 years of age or older to withdraw some of the equity in their home.  The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement Social Security, meet unexpected medical expenses, make home improvements or purchase a home with NO monthly payment.

How does a Reverse Mortgage Work?

Basically, the equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage.  You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing. This usually requires a 35 to 40% down payment but the senior will not have a monthly pinciple and interest payment and will not be tying up as much liquid cash as when they purchase a home for all cash.

Am I Eligible?

To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off with proceeds from the reverse loan, and you must live in the home.A big question for many borrowers is "Will we still have an estate to leave our heirs?"When the home is sold or no longer used as a primary residence, the cash, interest, and other HECM finance charges must be repaid.  All proceeds over the amount owed belong to your spouse or estate.  This means any remaining equity can be transferred to the heirs.  No debt is passed along to the estate or heirs.

 It is important to note that your still retain ownership of your home and you can refinance out of a reverse mortgage as long as there is equity remaining in your home.

 If you and your spouse are 62 or older and would like to access the equity in your home without an monthly payment for any reasons and be assured that you can remain in your home until you choose to move or do not meet the requirements which include home maintenance, and the ability to pay taxes and insurance, then the FHA Home Equity Conversion Mortgage is a positive option to consider. Contact a knowledgeable mortgage consultant to discuss all your options.


ABOUT THE AUTHOR


Toni F. Ryan | NMLS#230507

Senior Loan Officer | Synergy One Lending


Toni F. Ryan has over 20 years experience in mortgage lending - both on the wholesale and retail levels. She believes that education is key to making the best decision for YOU! She shares her insight into the lending world here and encourages your feedback. Don't forget to connect on Facebook!

The information contained herein is for informational purposes and should not be construed as personal advice. Please consult your mortgage professional BEFORE making any changes to your financial profile. No guarantees or promises are expressed and by visiting this site, you agree to not hold Toni F. Ryan or Synergy One Lending responsible for any decisions you make based on the information stated. All of the content here is the sole property of ToniRyan.com and cannot be duplicated without express written consent. If you choose to reference this material - please include a link to the source and state the authorship clearly.Synergy One Lending is licensed by the California Department of Business Oversight under the California Residential Mortgage Lending Act, Synergy One Lending Inc. NMLS 1025894. 3131 Camino Del Rio N 190, San Diego, CA 92108

© 2020 by Toni F. Ryan - NMLS#230507

Direct/Text (530) 305-7668  |  tryan@S1L.com

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(530) 305-7668

Synergy One Lending Inc., NMLS 1025894. 3131 Camino Del Rio N 190, San Diego, CA 92108. Alabama Consumer Credit License #22123; Arizona Mortgage Banker License 0926603; Arkansas Combination Mortgage Banker/Broker/Servicer License 109250; Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act – California License 4131356; District of Columbia Mortgage Dual Authority License MLB1025894; Hawaii Mortgage Loan Originator Company License #HI-1025894; Illinois Residential Mortgage Licensee #MB.6761115; Maine Supervised Lender License 1025894; Maryland Commissioner of Financial Regulation - Mortgage Lender License 21678; Minnesota Residential Mortgage Originator Exemption #MN-OX-1025894; Nevada Mortgage Broker License #4317. Licensed by the New Hampshire Banking Department 19926-MB; Licensed by the New Jersey Banking and Insurance Department – New Jersey Residential Mortgage Lender License 1025894; New Mexico Mortgage Loan Company License 1025894; Oregon Mortgage Lending License ML- 5208; Rhode Island Lender License #20163229LL. Rhode Island Loan Broker License #20163230LB; Vermont Lender License 6891. Washington Consumer Loan Company License CL-1025894. Toll Free #: (877) 978-1922. Subject to Credit Approval. www.nmlsconsumeraccess.org

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Loan Consultant | NMLS #230507

SYNERGY ONE LENDING

Corporate NMLS#1025894