How a Reverse Mortgage works
Reverse mortgage loans are a way for homeowners 62 or older (in Texas both borrowers must be 62 years of age or older) to convert their home’s value into cash or monthly payments without having to sell or move. Insured by the FHA Mortgage Insurance program (Mutual of Omaha Reverse Mortgage, LLC and it’s DBA’s are not acting on behalf of or at the direction of HUD/FHA or the federal government), the Department of Housing and Urban Development (HUD) allows these Homeowners to either borrow against the equity of their homes or purchase a new home based on the value or purchase price of that new property.

This is how a reverse mortgage works –

Qualifying homeowners can choose to receive generally tax-free payments from reverse mortgage lenders either on a monthly basis, in a lump sum, or as a line of credit. Consumer should consult a tax adviser.

Income, assets and liabilities will be verified.

No repayments are required as long as at least one borrower lives in their home as well taxes, insurance and HOA dues are paid on time and the home is maintained in good condition.

Social Security and Medicare benefits are not affected.

Reverse mortgage lenders recover the loan amount, plus accrued interest and mortgage insurance when the last homeowner passes away, chooses to sell the home or a family member chooses to purchase the home (for more details contact me).

When the loan is paid in full, all remaining equity associated with the property will be distributed to your heirs. Must comply with the terms of the mortgage.

Keep in mind:

Reverse mortgage borrowers continue to own their homes. Because there are no monthly loan payments due (homeowners must keep property taxes, insurance and HOA dues paid current and must maintain the home as their primary residence), the loan balance grows over time, meaning the remaining equity in the home decreases but your home value continues to increase.

Borrowers must continue to pay homeowner’s insurance and property taxes during the loan period. It is also the borrower’s responsibility to keep up with repairs. In fact, if a borrower fails to adhere to any of these obligations, it may become immediate cause for the loan to become due. In which case, it would become payable in full....