Using a Reverse Mortgage to Access Your Homes Equity
The times, they are a-changing. No longer considered a “last resort,” the reverse mortgage is suddenly quite in vogue. It is a great way to access your homes equity. It eliminates being cash poor, house rich without the need to make a move.
Intrigued? Financial planning professionals and homeowners are discovering the valuable benefit of using a Reverse Mortgage to access home equity.
FHA Insured Home Equity Conversion Mortgage
Reversing a mortgage with FHA guarantees is now more commonplace than ever before.
Home Equity Conversion Mortgage (HECM) facilitates borrowers 62 years of age and above using the equity in their homes while not making a move! It is quite simply the best of both worlds. A big benefit: owners never have to pay a monthly mortgage payment.
You read that right – there is no mortgage payment. Instead, the Lender pays you!
Of course, there is a catch. When the last remaining borrower on a HECM mortgage passes away, the loan must be paid off. If there is equity left, heirs can keep the home; if not, this can require the liquidation (sale) of the house.
Read The Fine Print Before Accessing Home Equity
The owner/borrower is still responsible to maintain the property in good condition, pay property taxes, pay homeowner’s insurance, and HOA dues, if applicable.
The amount of equity a borrower can access is based on:
- The age of the youngest borrower
- The value of the home
- Current interest rate
And a mortgaged reversed to access your homes equity can have implications for your estate and heirs. For instance, if you wanted to leave a home to a loved one, this might not be the right direction for you.
Reverse Financing’s Line of Credit Growth
A not often talked about, but very important feature of the Reverse Mortgage is the Line of Credit Growth factor attached to the program. Any available funds that a borrower does not access are left in a Line of Credit. This Line of Credit has a guaranteed growth rate of a half percent above the interest rate being charged.
It doesn’t matter what the market does, or where the home’s value goes, this line of credit growth can never be taken away from the borrower. And higher interest rates just mean higher growth to the line of credit. Get additional information on the subject here.
Nearly Seven Trillion Dollars of untapped Home Equity
Statistics show that there is currently 6.9 Trillion Dollars of Unused Home Equity among retirees. Blog co-author Cicely Carda can assist home owners like you access your homes equity with this style of financing. Contact Cicely directly at:
Strong Financial Group, Inc., Loan Officer NMLS#1673306, 720-619-0755, YourEasyHomeLoans@gmail.com
Since 2012, Colorado home owners have experienced exceptional home value appreciation. And yet, many of our seniors have valuable equity in their home, but still remain “house-rich and cash poor.”
This is where you can take advantage of the reverse financing, access your homes equity and enjoy a higher quality of life! All without selling your home (not what you would expect a Realtor to suggest – right?).
Do you know a senior who is struggling to make ends meet? For savvy owners, this can be an option to their financial challenges.
It is one of the best financial tools available for a homeowner to have the ability to Access their Home Equity without burdening them with another monthly payment that they cannot afford.
If you would like to find out if a Reverse Mortgage is right for you, or a loved one, please give me a shout for a free, no obligation analysis.