reverse mortgage facts in Greenville SC
There is a unique type of refinancing option available exclusively for homeowners who are at least 62 years old known as a reverse mortgage. If you are considering applying for this type of loan, it is important to understand the key details before making a decision. Having clear reverse mortgage facts can help you determine whether this option fits your financial goals. Below are ten important reverse mortgage facts you should know before moving forward.
Reverse Mortgage Facts: It Is A Loan
Reverse mortgage is a loan designed specifically for homeowners who are age 62 or older and want to access a portion of their home equity. The amount available to the borrower depends on several factors, including the value of the home, current interest rates, and the age of the youngest borrower or eligible non-borrowing spouse. Like any loan, it must eventually be repaid. This can happen when you sell the house or pay off the balance without a prepayment penalty.
What Are Your Options?
If you move out of the home or pass away, you and your loved ones will have several options for handling the loan balance.
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You may sell the property and use the proceeds to pay off the loan balance. Any remaining equity belongs to you or your heirs.
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Heirs may choose to purchase the home if they wish to keep it, live in it, or hold it as an investment. To do this, they would pay either the loan balance or 95% of the home’s appraised value, whichever is less.
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If you or your heirs decide not to keep the property, you may sign the deed over to the reverse mortgage lender and walk away from the home without additional obligation.
Reverse Mortgage Can Answer Immediate and Future Goals
home equity in Greenville SC
Many homeowners choose a reverse mortgage loan to eliminate, reduce, or consolidate existing debts such as mortgages and home equity loans. Others use the funds to create a financial safety net, strengthen retirement cash flow, or delay withdrawing from other retirement investments.
Reverse Mortgage Facts: What Are Your Options
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Single Purpose Reverse Mortgage – Offered by certain state, local, or non profit agencies and typically restricted to specific approved uses.
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HECM or Home equity conversion mortgage – Issued through a federally insured program. Borrowers must complete an approved counseling session before receiving approval.
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Proprietary Reverse Mortgage – A private loan product not insured by the federal government and typically available for higher-value homes.
HECMs Are Popular
The first federally insured reverse mortgage was issued in 1991. Within a year, 157 HECM loans were completed. By the end of 2017, more than 55,000 HECMs had been issued in a single year. Since the program began, over one million homeowners have used HECM loans to access their home equity.
Reverse Mortgage Facts: The Financial Assessment
Before obtaining a HECM loan, borrowers must complete a financial assessment. This process reviews income and credit history to ensure the borrower can maintain the financial obligations tied to the property. A credit score itself is not the sole deciding factor. Depending on the outcome of the assessment, a portion of the loan proceeds may be set aside to cover property taxes and homeowners insurance.
You Still Own Your House
If you qualify for a reverse mortgage, you do not transfer ownership of your home to the lender. You remain the homeowner, and your name stays on the title as long as loan obligations are met.
Five Payout Options
Unlike traditional loans, reverse mortgage loans offer several ways to receive funds. Depending on the HECM product selected, there may be up to five different payout options. Borrowers can choose
- a lump sum
- monthly payments
- a line of credit
- a combination of these methods.
Reverse Mortgage Facts: Proceed Values Vary
The amount you will receive from your home varies depending on several factors, including your home’s value, your age, your financial goals, and whether you still have an existing mortgage balance.
You can use reverse mortgage proceeds in any way that supports your financial plan. It is wise to discuss your options with a professional and evaluate how the loan fits into your retirement strategy. Speak with Reverse Mortgage Specialist while considering your long-term financial goals.
Call Reverse Mortgage Specialist if you want to know more about this type of loan.
Reverse Mortgage Specialist
Greenville, SC 29607
843-491-1436
www.reversemortgagespecialistusa.com/greenville
