Reverse Mortgage Blog Series - Week 1

Over the next few weeks we'll take a closer look at Reverse Mortgages and share some valuable insight from Reverse Mortgage Consultant, Mike Poole with TowneBank Mortgage. 

Mike Poole
Reverse Mortgage Consultant
(757) 513-1254
mike.poole@townbankmortgage.com
mikepoole.townebankmortgage.com
NMLS ID #: 617211

WHAT IS A REVERSE MORTGAGE?
A Home Equity Conversion Mortgage (or HECM) is a loan that allows homeowners age 62 or better to access a portion of the equity in their existing home or in a new home. 
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The proceeds of the loan are generally tax-free,* and borrowers are able to use the funds however they choose - whether it's to pay off debt, cover medical expenses, make improvements to their home, create a line of credit for future expenses, or purchase a new home.

BENEFITS: 

• FHA loan program
• Flexible monthly principal and interest payments. Borrower is responsible for property taxes, insurance and HOA dues if applicable
• Client retains the home's title
• Stay in your home

A REVERSE MORTGAGE COULD ALLOW YOU TO:

• Access your cash equity to be used for anything such as paying for medical needs, daily living expenses, home repairs, travel or simply enhance the quality of your retirement years
• Establish a line of credit for future needs
• Delay Social Security
• Delay or postpone draws on taxable retirement accounts

IMPORTANT FACTS

• Social Security and Medicare benefits are generally not affected by reverse mortgage proceeds
• Reverse Mortgage proceeds are generally not subject to federal income taxes*
• A Reverse Mortgage may be subject to credit or income qualification
• FHA sponsored loan program

ELIGIBLE PROPERTIES

• Single family homes
• 1-4 unit owner occupied properties
• FHA approved condominiums

QUALIFICATIONS:

• Homeowner must be 62 years of age or better
• Home must be a primary residence (second, vacation or investment homes not eligible)
• Home must meet minimum FHA property standards
• Homeowner counselling session required

HOW MUCH WILL I OWE?
The total amount you will owe depends upon the total amount of all cash advances and the interest on those cash advances

However, the amount will never be more than the value of the home at the time the loan is repaid. It does not matter how long you live or if your home depreciates, you will never owe more than the house is worth.

*Please consult your tax advisor regarding tax implications.