How To Unlock Your Home Equity And Access Tax Free Cash After Turning 62

What is a reverse mortgage?

If you are 62 years of age or older, you can release the equity held in your property to boost your income or spending power. The property has to be your primary residence. The process of releasing the equity is call a reverse mortgage.

How do I qualify for a reverse mortgage?

If you are aged 62 years or more, and either own your home outright or own a significant portion of the property (for example, you have paid 18 years of a 20 year mortgage) it is likely you could qualify for a reverse mortgage. Your credit score and other debt may be assessed as part of the process and could be a barrier to qualification. The bank or lender also needs to be sure that nobody else has a claim on your property and will look for liens on your house. Finally you will need to prove that you can keep up payment of property taxes, HOA fees and insurance premiums. These ongoing running costs will still be down to you even if you take a reverse mortgage.

How do I apply?

Reverse mortgages are also know as Home Equity Conversion Mortgages. These mortgages are FHA approved. We strongly recommend that you meet an HECM counselor to get their expert opinion on whether or not you quality for this kind of mortgage, and also for their tips on what you need to know before you submit your application.

How does the bank or lender recover the reverse mortgage?

When the bank or lender enters into a reverse mortgage, you are borrowing against the value of your home (or the equity that you own in your home). A bank or lender will be repaid when the house is sold or until you pass away.

How is the reverse mortgage paid to me?

You will have a number of options open to you. These can range from monthly payments to lump sum payments or a combination of the two. Your FHA approved lender will be able to talk through the options with you.

Are reverse mortgages good value for money?

As with any financial product it pays to shop around. Your HECM counselor should be able to give you a steer on the best available deals for your circumstances. You should expect some costs for setting up a reverse mortgage. These will include professional costs incurred by the lender such as surveys, appraisal fees and mortgage insurance premiums. There will also be an origination fee. The origination fee will not exceed $6,000 and is dictated by the value of your home. The fees associated with your mortgage can be paid out of pocket or deducted from the reverse mortgage.