Reverse mortgages are in place for owners ages sixty-two and older. These loans allow owners to pull out the equity in their home in order to pay off their mortgage sooner — and if there’s money leftover, it’s theirs!

Oftentimes, one’s net worth is largely caught up in their home and by pulling out their equity in either one lump sum or in monthly payments — owners can pay down their mortgage and gain more flexibility.

Reverse mortgages are a certain type of FHA loan which means they’re backed federally, giving these owners more security. The way it works is that when an owner moves or dies — the reverse mortgage funds goes to the lender and whatever is left over goes either to the still-living owner or to their beneficiaries.

To qualify, owners need about 50% equity in their home to typically secure an HECM (Home Equity Conversion Mortgage) which is the most common type of reverse mortgage. HECM is offered for homes $765,600 and below — homes valued above that require a jumbo reverse mortgage or a proprietary reverse mortgage.

Reverse mortgages can be great options for elderly clients who need more flexibility and we can walk you through every step of the way to see what works best for you!