Last Sunday’s Seattle Times featured an article by David Ranii: Seniors move forward on reverse mortgages.  Reverse mortgages provide tax free income by accessing the equity in the Senior’s home.  There are no credit or income qualifications, the youngest on title must be at least 62 years old.    Seniors can either receive monthly equity payments, a lump sum of cash or set up an equity line to draw on without mortgage payments.   Loan amounts are factored by how much equity is available in the property and the Seniors age. 

Many do not save enough for retirement and a reverse mortgage could be a great resource to help a senior enjoy their golden years.   In the Seattle Time’s story, 86 year old Trudy

took $2,000 in cash up front and established a line of credit that enabled her to withdraw an additional $3,000 last year — money she used to fix her roof, among other things.

Trudy’s son suggested the reverse mortgage which has allowed her to stay in her home.   Trudy says

“The reverse mortgage is a big help”.

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If Santa and the Mrs. would like to add a steady tax-free income each month while he’s volunteering, making toys and traveling around the world, he may want to consider how a Reverse Mortgage could benefit their lives.

Reverse mortgages can be a financial tool for Seniors who would like to have access to additional funds.   A reverse mortgage is essentially a loan against home equity for borrowers who are at least 62 years old.

Unlike a traditional mortgage where you make monthly payments, a reverse mortgage pays from your equity.   Instead of paying down your balance every month, your loan is actually growing as it provides tax free income to the Senior.  The mortgage is paid off when the last senior leaves the home.  Here is a calculator to see how much cash you may qualify for utilizing a reverse mortgage.

Reverse mortgages are easy to qualify for as long as their is enough equity in the property:

• Youngest borrower must be 62 years of age or older.
• No income or credit score requirements.
• Counseling is required from a HUD approved agency (no cost to the borrower).
• Property must be the primary residence.  (It does not need to be mortgage free).

In addition, reverse mortgages are non-recourse (the borrower can never owe more than the appraised value).

Santa and Mrs. Claus can use a reverse mortgage to:

• receive a lump sum of money (with no payments due until the last borrower leaves the home).
• receive a monthly tax free payment.
• purchase a primary residence.

The money can be used for anything they wish from bridging the financial gap between what they planned for retirement and the reality of retirement to vacationing or what’s on their Christmas list.

I’m pleased to be able to offer Reverse Mortgages and the Family Opportunity Mortgage programs both designed to help Seniors. Questions?  Please contact me or your local Mortgage Professional.