A reverse mortgage loan is a safe and secure financial tool that allows homeowners 62 years and older to tap into the equity they have earned in their home.
Borrowers have the option to receive their money as a lump sum, fixed monthly payments, a line of credit, or a combination of the three.
The equity in your home is yours to use. There are several ways a reverse mortgage can help homeowners in retirement, and there are no rules about how the funds may be used.
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The Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage, is a federally-backed home loan that allows borrowers who are 62 years of age or older convert part of their home’s equity into cash without having to sell the home.
The reverse mortgage replaces the current mortgage, if there still is one, which means that it also eliminates monthly mortgage payments. Homeowners are still required to pay property taxes, insurance, and maintain the home. Borrowers have the option of receiving their money as a lump sum, monthly payments, a line of credit or a combination of the three.
The reverse mortgage loan does not require monthly payments to pay it back. It is not repaid until the last borrower or eligible non-borrower no longer lives in the home.
Homeowners have used reverse mortgage funds for a variety of purposes including supplementing income, funding home renovations, paying off credit card debt, saving for a rainy day, and more.
A reverse mortgage may be a good option for those who want to retire in place but are in need of additional funds to round out their retirement portfolio.
To meet the unique needs of homeowners 62 and older looking to purchase a new home, the Home Equity Conversion Mortgage (HECM) for Purchase was created to allow these home buyers the opportunity to buy a new home using loan proceeds from the reverse mortgage.
A reverse mortgage for purchase loan gives you more flexible buying power while giving you the option to eliminate monthly mortgage payments.
The HECM for purchase comes with a flexible repayment feature, which gives homebuyers the option to repay as little or as much as they prefer each month. This allows homeowners to keep their retirement savings growing or their monthly budgets from being stretched with a monthly mortgage payment.
The Federal Housing Administration (FHA) backs HECM for purchase loans and categorizes them as non-recourse loans. This means that the borrower will never owe more than the home is worth.
Similar to a jumbo loan, homeowners age 62 or older can access significantly more home equity with a HomeSafe reverse mortgage than the HECM (Home Equity ConversionMortgage) loan limits allow.
The FHA puts a lending limit on reverse mortgages. The current lending limit for 2023 is $1,089,300. Mutual of Omaha Mortgage’s HomeSafe reverse mortgage allows qualifying homeowners to borrow up to $4 million.
This reverse mortgage loan solution could help homeowners fund a more comfortable and secure retirement while keeping productive high-worth assets working for your financial future.
If you currently have a lot of equity in your home, and you have a first mortgage with a very low interest rate, you may be able to get access to the remaining equity in your home, without refinancing the existing low-interest-rate mortgage. This is called a second mortgage.
The HomeSafe Reverse SECOND Mortgage is unique because it does not require any monthly re-payment for as long as the borrower abides by loan terms, i.e. paying all property charges on a timely basis, and occupying the home as your principal residence. Call today to see if you qualify 415-259-4979
Competitive interest rates and desirable home market conditions might have you considering if now is a good time to refinance your mortgage loan.
If you already have a reverse mortgage from Mutual of Omaha Mortgage or another lender, there are several reasons why you may be interested in refinancing your current reverse mortgage.
Interest rates go up and down. If interest rates are lower now than they were when you first took out your reverse mortgage loan or you are interested in moving from an adjustable rate to a fixed rate, it may be worth looking at refinancing your loan.
Home values have gone up around the country in recent years. If your home’s value is significantly higher than when you first took out your reverse mortgage, you may have even more home equity you are able to access.
The FHA increased its lending limit for 2023 to more than a million dollars for the first time, which means you may be able to access more than what was available when your loan was originated.