Reverse Mortgages

A reverse mortgage is a loan for senior homeowners that uses a portion of the home's equity as collateral. The loan generally does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time, the estate has approximately 6 months to repay the balance of the reverse mortgage or sell the home to pay off the balance. All remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage.

A typical mortgage requires the homeowner to pay the lender monthly, with a reverse mortgages the opposite is true. The homeowner with equity may receive money monthly, upfront lump sum, a line of equity, or a combination of monthly payments and a line of equity.

Reverse advances are not taxable, and generally don't affect your Social Security or Medicare benefits. You retain the title to your home, and you don't have to make monthly repayments.

Advantages to reverse mortgages:

  • You are not required to qualify for a mortgage based on your income. A reverse loan is based on age and the value of your home
  • Supplemental retirement income
  • Lump sum disbursement upfront
  • Paying off of a current mortgage with no monthly payments required from the homeowner
  • You may use your proceeds to pay off other debt
  • Tax advantages. (Talk with your tax advisor for details)
  • Allow the homeowner to remain in their home without monthly mortgage payments

To see if a Reverse Mortgage is right for you contact one of our loan specialists by filling out an application online today or calling us at (559) 840-3333.