Everyone’s story is different.
That’s why we offer programs for every type of borrower and the expertise to help you determine whether a reverse mortgage will help you achieve your specific goals, and, if so, which option is right for you.
Reverse Mortgage Options
In today’s ever-changing financial landscape, individuals and families are constantly seeking innovative ways to secure their financial future, especially during retirement. Reverse mortgages have emerged as a powerful financial tool, providing homeowners aged 62 and older with a unique opportunity to tap into home equity. Unlike traditional mortgages, reverse mortgages offer a distinct advantage by allowing homeowners to convert a portion of their home equity into tax-free cash, without the burden of monthly mortgage payments. Here are some of the various reverse mortgage options available, empowering you with the knowledge needed to make informed decisions and secure a more financially stable and enjoyable retirement.
FHA-insured
The most popular reverse mortgage option is an FHA (Federal Housing Administration) loan. This is for homes appraised at a value of $970,800 or less. You can choose to receive a lump sum or a line of credit. (Note: Borrowers are responsible for paying their insurance premiums.)
Jumbo
Sometimes referred to as a proprietary loan, this option is not FHA-insured and typically for homes that are worth up to $10 million. You can choose to receive a lump sum or a line of credit.
Lump sum
Your interest rate is fixed; however, you have access to less of your home’s equity—typically 60 percent. Also, an FHA-insured loan imposes a first-year draw limit, which is applied to the LOC (line of credit) and fixed rate.
Line of credit
Your interest rate may vary; however, you typically have access to more of your home’s equity because you’re not tapping into your funds every month, but, rather, reserving them for future expenses. The longer funds go unused, the more the principal grows.
Refinance
If rates drop and your home’s value increases—or you want to add your spouse to the loan—you may be able to refinance your reverse mortgage to unlock additional equity; however, you can refinance no sooner than 12 months from when you closed on your original loan.
Purchase
You may be able to use a reverse mortgage to purchase a new home as long as your loan documents state that you intend to occupy the new home within 60 days of closing.
