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August 15th, 2022
Choosing a Reverse Mortgage to Purchase or Refinance (HECM vs JUMBO)
A reverse mortgage is a unique loan that allows homeowners, who are over 62 for HECM or 55 for Jumbo, to convert part of their home equity into cash with no monthly mortgage payment. Besides paying off your current forward mortgage, a reverse mortgage cash-out can be used for various things, such as paying for the cost of living, buying a new car, travel or paying for medical expenses. A reverse mortgage is different from a traditional, forward mortgage because it allows you to borrow money without having to incur a monthly loan payment. An FHA reverse mortgage loan is also known as a home equity conversion mortgage (HECM). Federally-insured reverse mortgages are guaranteed by the U. S. Department of Housing and Urban Development (HUD). Jumbo reverse mortgages are private market programs that offer homeowners with high value, high equity homes larger loan amounts than can be provided with the HECM program.
There are many reasons why people use reverse mortgages. They include:
To retire earlier by reducing monthly obligations
To provide additional cash flow without incurring income tax
To pay off debts or medical bills
To stay in their homes versus downsizing to reduce monthly expenses
To pay for home repairs/improvements
To travel or enhance quality of life
To provide funds for their health care
To have contingency funds on hand for emergencies or opportunities
To sell their current home, purchase a new primary residence with less down, keeping more funds liquid, and ending up with no monthly home loan payment to make
To accomplish estate planning goals
While qualifying for a reverse mortgage is easier than with forward mortgages, A+ Home Loans will be able to determine based current program requirements what reverse options you may have. The information you provide will help A+ Home Loans determine best options and present you with an individualized information package to review.
To find out more about reverse mortgage loan terms and requirements, contact A+ Home Loans for reverse mortgage information. Also, more information is available about reverse mortgages on the Federal Trade Commission Consumer website.