Q. I am a widow and can not afford to take chances. Is a REVERSE MORTGAGE safe?
A. A FHA REVERSE MORTGAGE is a loan for senior homeowners insured by the federal government and made under particular guidelines set by U.S. Department of Housing and Urban Development (HUD) to ensure that it was safe and well designed. These REVERSE MORTGAGEs are contractually guaranteed. Your security is a high priority for us.
Q. Can I refinance a REVERSE MORTGAGE, as I would be able to do with a traditional home mortgage?
A. Yes. There is no prepayment penalty, so you may refinance or sell at any time. In many instances, it may be possible to refinance in later years and obtain more money depending upon the home value, your age, and the other factors in place at that time.
Q. Are REVERSE MORTGAGE interest rates fixed or variable?
A. We have both fixed and variable REVERSE MORTGAGE available. Each of these programs may have beneficial options for you. Your HomeSafe agent will help you determine which one will benefit you most.
Q. What are the tax consequences of a REVERSE MORTGAGE?
A. The money received from a REVERSE MORTGAGE is not considered to be income by IRS and therefore is tax free (always check with your tax professional regarding tax advise).
Q. If I take on a REVERSE MORTGAGE, how will it affect my government benefits?
A. The funds from a REVERSE MORTGAGE do not affect regular Social Security or Medicare benefits. If you receive SSI, Medicaid, or other public assistance, you will want to structure and use your REVERSE MORTGAGE in a very specific manner so that you remain within the qualifying parameters of these programs so that you may also continue to receive all of the benefits you may be entitled to with these programs as well.
Q. How is a REVERSE MORTGAGE like a home equity loan? How is it different?
A. Both a REVERSE MORTGAGE and a home equity loan use the equity you have built up in your home to provide you with readily available cash. Most homeowners look into a Home Equity Line of Credit (HELOC) before they consider a REVERSE MORTGAGE. However, that may be a mistake. A REVERSE MORTGAGE may be less understood but could be a better option for those that qualify. The Home Equity Conversion Mortgage (HECM) or REVERSE MORTGAGE is an FHA regulated mortgage option for mature homeowners designed to assure financial security during retirement. Before making a decision, consider the follow:
Home Equity Line of Credit
|- No assets other than your home||- Prove you have money|
|- No personal guarantee||- You guarantee the loan|
|- Property value drops, you don't pay||- You pay anyway|
|- Program is secure||- May revoke your line at any time|
|- No monthly mortgage payments ever, however, like any conventional home mortgage, you are still required to pay home insurance and taxes||- You pay ongoing monthly payments & your payments can increase dramatically over time.|
As demonstrated, a REVERSE MORTGAGE is clearly a safer and more secure alternative over the HELOC. REVERSE MORTGAGEs accesses the equity in your home to assist with the costs of retirement life while still living in and owning your home. You no longer have a monthly mortgage payment and you can receive a lump sum of cash to spend or invest as you wish. The best part, this money does not have to be paid back as long as you live and reside in your home.