About Reverse Mortgage

A reverse mortgage allows you to borrow money from the equity in your home while continuning to living  there without payments. In the past, you had to sell your home or obtain a traditional loan which had to be repaid in monthly installments.

Reverse Mortgage Advantages

A huge Advantage is that your cash is distributed to suit your needs and lifestyle. The lender pays out the loan in three ways: lump sum, monthly payouts, or line of credit. As long as you have money to access, you can change your mind on how you take the money at any time. This allows the homeowner to be flexible with the money.

Other Advantages include:

  • The funds loaned to you are tax-free (consult your tax advisor for your specific situation)
  • Your loan does not affect your Social Security or Medicare benefits
  • You and your heirs will keep any remaining equity
  • You can never owe more than the value of your home
  • There are no application fees
  • Your piece of mind is invaluable. This loan will provide you the relief you have been looking for, remember it is a loan secured by a lien on your home
  • You may continue to own your home in your name or in your trust, there will be a lien placed on the propety by the lender.
The loan is subject to foreclosure for failure to pay property taxes and insurance, to maintain the property and to comply with the loan terms.‚Äč

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What is a Reverse Mortgage?

A Reverse Mortgage, also called a Home Equity Conversion Mortgage (HECM), is a loan that uses your home as collateral, but instead of making payments to a lender, the lender pays you. As long as you live in the home and comply with loan terms including payment of taxes and insurance, you will never have to make a mortgage payment, in other words you will have no personal liability for the payment of the debt. Upon the sale or transfer of ownership of the property the loan will then be repaid.

Commonly Asked Questions

How much can I borrow?
The amount of money the borrower can receive is determined by the age of the youngest borrower, interest rates, appraised value, sale price and the maximum lending limit. It will be specific to your situation. We offer a no obligation assessment. Contact us to discuss.

What types of homes are eligible to be collateral?
Most single-family homes, two-to-four unit owner-occupied dwellings and approved condominiums and manufactured homes are eligible for a reverse mortgage loan. The home must meet FHA minimum property standards.

Am I eligible to take out a Reverse Mortgage?
To be eligible the FHA requires all borrowers on title to be 62 years or older. Borrowers must also meet financial eligibility criteria as established by HUD. If there is an existing mortgage on the home, it must be paid off with the proceeds from the reverse mortgage loan.

What happens if I want my home to be a part of my inheritance?
When the reverse mortgage loan does become due, the borrower’s heirs and/or estate may choose to repay the reverse mortgage loan and keep the home. Or, they can put the home up for sale in order to repay the loan. If the home sells for more than the balance of the reverse mortgage loan, the remaining home equity passes to the heirs.

If the home sells for less than the owed balance, the estate is not required to pay more than the value of the home at the time the loan is repaid.

A reverse mortgage loan is “non-recourse”, meaning that if you sell the home to repay the loan, you or your heirs will never owe more than the loan balance or the value of the property, whichever is less; and no assets other than the home must be used to repay the debt.

What monthly payments will I have?
You will not have mortgage loan payments, but still need to continue paying property taxes, insurance and HOA dues if any while maintaining the home according to FHA guidelines.

What can I use the money from the Reverse Mortgage loan for?
Reverse mortgage loans are commonly used to pay for home renovations, medical and daily living expenses. Homeowners who have an existing mortgage must use the reverse mortgage loan to pay off their existing mortgage. Ultimately, you can usually use it for anything you need.

Easy Process

4 Easy Steps

Step 1: The first step is to meet with us and decide if a reverse mortgage is right for you. Our reverse mortgage experts can meet with you at our office or your home and help guide you through the application process and what to expect. You will be left with a complete copy of ALL the documents for you and your trusted advisors or family member(s) to review.

Step 2: Moving forward means that you are interested and are ready for your next steps. Counseling is required from an independent third party, HUD-approved counselor, for all reverse mortgage borrowers and you are responsible for this cost. THIS IS TO BENEFIT YOU. You may think this is not needed, but it is to protect you and we believe an informed borrower is a happy one.

You should do this as soon as possible. Many times counseling can be completed over the telephone too if that works better for you. You will receive two certificates; one to keep and the other to send to our office.

Step 3: Complete an application. As soon as we receive your HUD counseling certificate, we will contact you to arrange an appraisal of your property, you are responsible for this cost. With the application, we will begin to process your paperwork while we wait for the appraisal. We will be in contact regularly during this time.

Step 4: Once your loan has been approved, we will contact you to arrange for the signing of your final loan documents. And you should typically have funds within a weeks time.

What can you do with the Money?

When you take out a Reverse Mortgage from Alliance, that money is yours to do as you want. Some clients have used the money for:

  • Home renovations
  • Pay off a traditional mortgage with your reverse mortgage loan proceeds
  • Keep line of credit for emergencies
  • Down-payment on a first home for their children
  • Living and medical expenses