NITTY-GRITTY

 

The details you need to know about funding your 62+ Lifestyle with a Reverse Mortgage!

 
 
 

CASH FLOW

NITTY-GRITTY of a REVERSE MORTGAGE has to do with CASH FLOW. You'll gain  access to your HOME EQUITY and  improve your  CASH FLOW. Often you will have multiple choices on how to receive payments - a lump sum, monthly or only as needed.  If you have a current mortgage to pay off, not having a monthly principle and interest payment will keep more money in your pocket; also improving your CASH FLOW.

lINE OF CREDIT

To gain access to cash when it's needed, many borrowers set up a LINE OF CREDIT (LOC) as part of their REVERSE MORTGAGE. The HECM (Home Equity Conversion Mortgage - a federally insured REVERSE MORTGAGE) has a unique feature called a "growth rate". This is the NITTY-GRITTY which allows the unused portion of the LINE OF CREDIT to grow larger over time.  Giving you, the borrower, access to cash when unforeseeable events occur in the distant future.

PAY OFF DEBT

A REVERSE MORTGAGE refinances and replaces any existing mortgage, and pays off any federal liens. If there is sufficient loan proceeds, you might also pay off other debt - like car payments, student loans, credit cards, etc.  The NITTY-GRITTY would be that you'll be consolidating your current debt into one loan - your REVERSE MORTGAGE.

NITTY-GRITTY IS ABOUT THE DETAILS YOU NEED TO KNOW!

Before you get a Reverse Mortgage

ASSET PRESERVATION

Your investment, bank and retirement accounts are better preserved by having another "bucket of cash" to draw from when your circumstances change. This could be a volatile Stock Market where withdrawing funds is not advisable, for even health or family issues. In similar cases the REVERSE MORTGAGE often performs the function of ASSET PRESERVATION. Helping your money last your lifetime.

No Monthly Mortgage Payments

This is the NITTY-GRITTY that you'll really love! There are no monthly principle and interest payments required, You are required to pay your property taxes, hazard insurance, HOA or other property charges when due.  The loan balance is due when the last borrower on title (or eligible non-borrowing spouse) permanently moves out or a repayment event occurs.

BUY A HOME

The HECM for PURCHASE (H4P) loan product became part of the REVERSE MORTGAGE toolbox in 2008 as part of the Home Economic Recovery Act (HERA).  Eligible homeowners can use Cash plus a REVERSE MORTGAGE to buy a home and have no monthly principle and interest payments.* 

*Homeowners must continue to pay property taxes, hazard insurance, HOA and other property charges and and maintain the home as their primary residence.

When You Decide to RIGHT SIZE to Fit Your 62+ Lifestyle!

Nitty-Gritty of Buying a Home with CASH and a Reverse Mortgage

Thinking about selling and buying a home that will last the rest of your life? 
  • You could try to buy with a traditional loan - BUT, unfortunately, if you are retired or have reduced income you won't qualify for a loan.  Or you might have to settle with a very small loan and less-than-desirable-home.
  • BUT, why have mortgage payments during retirement? You might consider the HECM (Home Equity Conversion Mortgage (the federally insured reverse mortgage) for PURCHASE loan. Called the "H4P".

A HECM for Purchase Reverse Mortgage loan might be just what you need to buy the home you really want - And keep more cash in your pocket for your retirement!

  • You could pay ALL CASH to buy a home without mortgage payments; but you might have to spend most or all of the proceeds from the sale of your present home.  Leaving you "HOUSE RICH & CASH POOR."  Not a great way to enjoy your 62+ lifestyle!
  • Instead, you might use a REVERSE MORTGAGE PLUS about HALF THE CASH as you would need for an all cash purchase.  It is often said about the H4P (HECM for Purchase) program, that you get "TWICE THE HOUSE for HALF THE CASH." Why not buy the home that perfectly fits your 62+ lifestyle?