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Reverse
Mortgage
What is a reverse mortgage?
A reverse mortgage is a home loan (used for any purpose) where
seniors, 62 and older, can access the equity (cash) built up
in their home.
There are several different reverse mortgage programs. Fannie
Mae Home Keeper®, Jumbo Cash-Out loan, and the HUD-insured Home
Equity Conversion Mortgage (HECM) are three such programs. As
demand increases, more reverse mortgage programs from different
organizations will become available.
It is called a reverse mortgage because you borrow money from
a lender, but the lender makes monthly payments to you, rather
than you making monthly payments to the lender. All interest
is paid at the end of the loan, rather than in the beginning.
What are some of the benefits of a reverse mortgage?
- Strengthen your personal and financial independence.
- Help pay for health care or other needs.
- You can never lose your home in foreclosure as long as you
maintain the property tax and insurance payments.
- The loan is only paid off when the house is sold by you or
your heirs, or all borrowers move out of the house.
- Keep your Medicare or Social Security benefits.
- Use it as a credit line and draw upon it as needed.
- Get all your cash right away.
- Get the best of
both get cash now and have a balance in reserve to use as
a credit line.
- No Income Requirements: The homeowner does not need to be
working and is not qualified based on income.
As the homeowner receives monthly cash income, the loan balance
increases. In the following twelve-month example, the homeowner
begins with a debt-free home. As money is received by the homeowner,
the mortgage grows. By the end of month twelve, the homeowner
owes the bank $6,000 plus $232.44 interest. All Reverse Mortgage
loans have a variable rate.
Assumptions*
| Regular monthly advances |
$500 |
| Annual interest rate |
7.0 % |
| Monthly interest rate |
.583% (.07 / 12) |
| 0 |
0 |
0.00 |
0.00 |
$500.00 |
| 1 |
$500.00 |
$2.92 |
$502.92 |
$500.00 |
| 2 |
$1,002.92 |
$5.85 |
$1,008.77 |
$500.00 |
| 3 |
$1,508.77 |
$8.80 |
$1,517.57 |
$500.00 |
| 4 |
$2,017.57 |
$11.77 |
$2,029.34 |
$500.00 |
| 5 |
$2,529.34 |
$14.75 |
$2,544.09 |
$500.00 |
| 6 |
$3,044.09 |
$17.76 |
$3,061.85 |
$500.00 |
| 7 |
$3,561.85 |
$20.78 |
$3,582.63 |
$500.00 |
| 8 |
$4,082.63 |
$23.82 |
$4,106.44 |
$500.00 |
| 9 |
$4,606.44 |
$26.87 |
$4,633.31 |
$500.00 |
| 10 |
$5,133.31 |
$29.94 |
$5,163.26 |
$500.00 |
| 11 |
$5,663.26 |
$33.04 |
$5,696.29 |
$500.00 |
| 12 |
$6,196.29 |
$36.15 |
$6,232.44 |
$500.00 |
*Many criteria are considered when determining the reverse mortgage
loan amount, interest rate, etc.
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Integrity
Mortgage & Financial Inc. - 866-816-9810