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What is a Reverse Mortgage Loan?
A reverse mortgage loan is a flexible financial tool for homeowners aged 62 and older that is backed by the federal government.
It allows you to tap into your home’s equity in various ways, such as receiving a lump sum, fixed monthly payments, or a line of credit.
There are no restrictions on how you can use the funds, giving you the freedom to enhance your retirement lifestyle. Whether it’s embarking on adventures, making home improvements, or providing financial support to loved ones, a reverse mortgage loan empowers you to make the most of your home’s value.
What Can You Do With a Reverse Mortgage?
Supplement Your Income
With a fixed monthly payment plan, you can access your earned equity to supplement your monthly income to ensure that you have enough money to cover your bills each month.
Eliminate Monthly Mortgage Payments*
A reverse mortgage does not require monthly mortgage payments to pay it back, and if you still have a traditional mortgage on your home when you take out your reverse mortgage loan, it will pay it off.
Be Prepared for the Unexpected
Unplanned expenses are going to happen. One way to use a reverse mortgage is as a line of credit which allows you to use it on an as needed basis. And the money you don’t touch, well that balance will actually grow while it sits there. be sent to processing and underwriting.
Retire in Your Home
You’ve built a life in the community where you live, and that’s where you would like to spend your retirement years. A reverse mortgage makes it easier to do just that as you are able to access that equity you’ve watched grow over the years.
Reverse Mortgage Options
HECM Reverse Mortgage
The Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage, is a government-backed home loan that enables individuals aged 62 or older to convert a portion of their home’s equity into cash without having to sell the property.
This type of mortgage replaces any existing mortgage, if applicable, thereby eliminating the need for monthly mortgage payments. However, homeowners are still responsible for paying property taxes, insurance, and maintaining the home. Borrowers have the flexibility to receive their funds in various ways, including a lump sum, monthly payments, a line of credit, or a combination of these options.
One key advantage of a reverse mortgage is that borrowers are not required to make monthly repayments. The loan is only repaid when the last borrower or eligible non-borrower no longer resides in the home.
Reverse Mortgage for Purchase
The Home Equity Conversion Mortgage for Purchase (HECM for purchase) was specifically designed to cater to the unique needs of homeowners aged 62 and above who are looking to buy a new home. This innovative loan option allows these home buyers to finance a portion of their new purchase with a reverse mortgage.
With a reverse mortgage for purchase loan, you not only gain greater flexibility in your buying power but also have the option to eliminate monthly mortgage payments. This means that as a homebuyer, you can choose to repay as little or as much as you prefer each month. This feature enables homeowners to preserve and grow their retirement savings, while also preventing their monthly budgets from being strained by a mortgage payment.
Jumbo Reverse Mortgage
A jumbo loan provides homeowners aged 62 or older with the opportunity to tap into a much larger amount of home equity compared to the limits imposed by the HECM (Home Equity Conversion Mortgage) loan.
The FHA sets a cap on reverse mortgages, with the current limit for 2023 being $1,089,300. However, Retirement Funding Solutions jumbo reverse mortgage offers eligible homeowners the ability to borrow up to $4 million.
By utilizing this loan option, homeowners can potentially finance a more enjoyable and stable retirement while ensuring that their valuable assets continue to generate income for their financial future.
Refinance Loan
If you already have a reverse mortgage from Retirement Funding Solutions or another lender, there are several reasons why you might want to refinance.
Interest rates fluctuate, and if they are currently lower than when you initially took out your reverse mortgage loan, or if you want to switch from an adjustable rate to a fixed rate, refinancing could be beneficial.
Home values have been on the rise nationwide in recent years. If your home’s value has significantly increased since you obtained your reverse mortgage, you may have more home equity available to tap into.
In 2023, the FHA raised its lending limit to over a million dollars for the first time. This means that you may now have access to more funds than were originally available when your loan was originated.
