What is a reverse mortgage?
A Reverse Mortgage, also known as a Home Equity Conversion Mortgage (HECM), is a home loan available to those who are 62 or older and own their home. This loan allows borrowers to convert a portion of their home’s equity into cash. The reverse mortgage was originally designed as a way for seniors with limited cash income to use their home’s accumulated wealth for living expenses or health care expenses, but the loan does not limit how the cash can be used.
With a reverse mortgage, the flow of cash is reversed. Instead of the borrower making monthly payments to a lender, like a traditional home loan, the lender pays the borrower. These payments can be made monthly or in a lump sum depending on the loan’s terms.
Those who invest in a reverse mortgage are able to stay in their home for the remainder of their life or until the home is sold. Once this happens, the bank acquires ownership of the home. During the term of the loan, the borrower is still responsible for property taxes, homeowners insurance, and maintenance.
Many seniors may benefit from a reverse mortgage, but there are many factors that need to be considered in order to make the right decision. A HECM counselor can meet with you to discuss program eligibility requirements, financial implications and alternatives to obtaining a HECM and repaying the loan.
There are several requirements that a potential reverse mortgage borrower must meet in order to qualify:
• Must be 62 or older
• Own the property
• Must occupy the property as your principal residence
• Not be delinquent on any federal debt
• Attend a consumer information consultation given by a HECM counselor
At Apple Mortgage LLC, we are your New Hampshire reverse mortgage (HECM) counselor and we specialize in helping those in Gilford, Plymouth, and Meredith find the right solution for their financial needs. To schedule a consultation, please call us today at (603) 527-1188 or click here.