If you’re 62 or older—or as young as 55 in some states—a reverse mortgage may be a valuable option to access your home equity. We offer both Home Equity Conversion Mortgages (HECM) and proprietary reverse mortgages, along with Reverse Second options in select states, all designed to help you make the most of your home’s value and support your financial goals.
Access to Home Equity: Reverse mortgages allow homeowners to tap into their home equity without having to sell or move out. It’s a way to convert a part of their home’s value into cash.
No Monthly Mortgage Payments: Unlike traditional loans, there are no monthly mortgage payments required. Instead, the loan is repaid when the homeowner sells the home, moves out, or passes away.
Financial Flexibility: Funds from a reverse mortgage can be received as a lump sum, monthly payments, a line of credit, or a combination of these options, providing flexibility to meet different financial needs.
Tax-Free Proceeds: The money received from a reverse mortgage is generally tax-free, as it is considered a loan advance rather than income. (It’s always wise to consult a tax advisor for specifics.)
Protection Against Market Fluctuations: For HECMs, reverse mortgages are federally insured, which protects borrowers if the loan balance ever exceeds the home’s value, meaning borrowers (or their heirs) will never owe more than the home is worth.
Retain Ownership: Homeowners retain title to their home as long as they meet the loan obligations, such as maintaining the property, paying property taxes, and homeowner’s insurance.
- HECM 62 and older in all states.
- Proprietary, varies by states, some as low as 55.
- Must be Primary residence that you live in most of the year.
- Property must be in goo conditional and structurally sound.
- Unlike a Traditional Mortgage debt-to-income ratios will not be used. However, you must have enough residual income to cover living expenses, taxes, insurance, homeowners' insurance and flood where required.
- You must participate in independent counselling.
HECM (Home Equity Conversion Mortgage)
Federally Insured: Backed by the FHA, HECMs are the most common type of reverse mortgage in the U.S., offering protections and guidelines to safeguard borrowers.
Age Requirement: Borrowers must be 62 or older to qualify. Loan Limit: Subject to FHA loan limits, which can restrict the amount available based on home value and other factors.
Flexible Payout Options: HECMs offer payout options like a lump sum, monthly payments, a line of credit, or a combination, allowing homeowners to choose what best suits their needs.
Protection Against Home Value Declines: If the loan balance grows beyond the home’s value, the homeowner or heirs are protected by insurance, meaning they won’t owe more than the home is worth when the loan is due.
Proprietary Reverse Mortgage
Not Federally Insured: These are private loans offered by lenders, so they’re not backed by the FHA. This allows for more flexibility but also means they lack some of the protections offered by HECMs.
Age Requirement: In some states, homeowners as young as 55 may qualify, offering access to a broader age range.
Higher Loan Limits: Proprietary reverse mortgages can be more beneficial for high-value homes, as they typically offer higher loan amounts than HECMs.
Tailored Options: Designed with flexibility in mind, proprietary reverse mortgages often provide more custom solutions for borrowers with unique financial needs or high-value properties.
Did you know you can buy a home with a reverse mortgage? This option—available through both HECMs (Home Equity Conversion Mortgages) and Proprietary Reverse Mortgages—can help you purchase a new home without monthly mortgage payments.
Here’s how it works:
Flexible Down Payment: With both HECM and Proprietary options, you’ll make a one-time down payment, determined by your age, current interest rates, and the home’s price, leaving more of your assets intact.
No Monthly Payments Required: You won’t have to make monthly mortgage payments. The loan is repaid when you sell, move out, or pass away, offering added financial flexibility.
HECM vs. Proprietary Options:
HECM: Federally insured, available to buyers aged 62+, and suited to standard loan limits.
Proprietary Reverse Mortgage: Offered by private lenders with more flexibility. Available in select states for borrowers as young as 55, this option can be beneficial for high-value properties. Perfect for New
Lifestyle Choices: This option works well for downsizing, relocating, or finding a home that fits your lifestyle, with added peace of mind and financial freedom
The home must be debt free before the client can qualify. This is untrue as there can be an outstanding mortgage, however, there needs to be enough equity in the home to pay off any existing mortgages.
The bank owns the home. This is also untrue as a Reverse Mortgage is like any other mortgage in that the homeowner holds title to the property.
The heirs incur any outstanding mortgage debt. Also untrue as a Reverse Mortgage is a non-recourse loan. This means that you never pay back more than your home is worth at time of payoff. You will never leave a bill to your heirs if your home is worth less than what you owe the mortgage insurance steps in and pays the difference.