Basics of Reverse Home Mortgage

Author

Anchor Funding Inc

Posted on

Nov 30, 2023

Book/Edition

Alabama - Gulf Coast

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Basics of Reverse Home Mortgage

A reverse home mortgage is a type of loan that allows homeowners to access a portion of their home equity without having to sell their home or make monthly mortgage payments. Unlike a traditional mortgage, the loan balance of a reverse mortgage increases over time and is typically only repaid when the homeowner sells the home or passes away.

Differences from Traditional Mortgage

  • Reverse mortgages do not require monthly mortgage payments, while traditional mortgages do.
  • The loan balance of a reverse mortgage increases over time, while the loan balance of a traditional mortgage decreases over time as payments are made.
  • Reverse mortgages are typically only repaid when the homeowner sells the home or passes away, while traditional mortgages are repaid over a set term.


A Financial Solution for Seniors

·       For seniors, a reverse mortgage can be a great financial solution. It allows them to access the       equity in their homes without selling or giving up ownership.

·      Reverse mortgages are also a great way to supplement retirement income. They provide a steady stream of funds that can be used to cover living expenses.

·   With a reverse mortgage, seniors can enjoy their retirement years and have peace of mind knowing they have a reliable source of income.

Reverse mortgages are also a great way to pass on wealth to heirs. The loan is paid off from the sale of the home, and the remaining equity is passed on to the heirs.

Eligible homeowners obtain reverse mortgages for many reasons including: 

·         Repairing or modifying the home to meet the physical needs of getting older

·         Supplementing retirement income to meet expenses

·         Managing the costs of in-home care

·         Paying off an existing mortgage

·         Paying increased bills due to inflation and economy

·         Paying property Taxes

·         Delaying Social Security

·         Providing a source of funds for living expenses in lieu of liquidating financial investments during     times of market downturn or disruption

·         Helping retirement savings last longer

·         Purchasing a retirement home

 

 

Recent Clients

A retired couple in their late 60s, John and Susan, were struggling to make ends meet on a fixed income, due to inflation and the cost of living increasing. They had significant equity in their home but were hesitant to sell it and downsize because of the current real estate market.  They decided to explore a reverse mortgage as an option to access their home's equity without having to sell it.

  • The reverse mortgage allowed John and Susan to access their home's equity and use the funds to pay off their existing mortgage and cover their increased living expenses.
  • They were able to stay in their home and maintain their quality of life, without having to worry about making monthly mortgage payments.


Mary Anne, a retired infusion nurse, suffered some medical challenges and her insurance did not cover all of her additional expenses.  She decided a reverse mortgage was her best option. 

  • It allowed her funds to seek non-traditonal treatment and was able to eliminate the financial stress in her life, allowing her body to heal.


A retired widow in his late 70s, James wants to stay in his home as long as possible. His home was mortgage free and he intends to leave it to his two children who live out of state. 

  • The reverse mortgage allowed him to access his home's equity and use the funds to make the modifications to continue staying in the home unassisted.
  • It allows him the peace of mind knowing the has additional money to pay an in-home care giver if and when he needs one.
  • He is able to stay in his own home and now worry about being a burden on his out of state children.  He expressed to me that feeling of relief is priceless.

This article was submitted by Nicole Cramer with Anchor Funding, Inc.  Contact Nicole at 251-349-9891 or email her at nicole@cramergrp.com for more information about whether a reverse mortgage can work for you.

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Local Services By This Author

Anchor Funding, Inc

Reverse Mortgages , Daphne, Alabama,

Eligible homeowners obtain reverse mortgages for many reasons including:  Repairing or modifying the home to meet the physical needs of getting older Supplementing retirement income to meet expenses Managing the costs of in-home care Paying off an existing mortgage Paying increased bills due to inflation and economy Paying property Taxes Delaying Social Security Providing a source of funds for living expenses in lieu of liquidating financial investments during times of market downturn or disruptionHelping retirement savings last longer Purchasing a retirement homeCall Nicole Cramer at 251-341-9891 for more information about reverse mortgages.