Reverse Mortgage

A reverse mortgage is a unique type of home loan, which allows for the conversion of a portion of the equity in your home into cash. A reverse mortgage enables older homeowners (62+) to borrow against the equity in their homes without having to sell the property, take on a new and additional monthly mortgage payments, or give up the title. The reverse mortgage is named as such because the payment stream is literally “reversed.”  Unlike traditional mortgages, lenders make payments to you instead of you making monthly payments to a lender.

Types of Reverse Mortgages

There are three types of reverse mortgages:

  • federally-insured reverse mortgages, known as Home Equity Conversion Mortgages (HECMs) and backed by the U. S. Department of Housing and Urban Development (HUD)
  • single-purpose reverse mortgages, offered by some state and local government agencies and nonprofit organizations
  • proprietary reverse mortgages, private loans that are backed by the companies that develop them

Unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence or fail to meet the obligations of the mortgage.  Reverse mortgage loan advances generally do not affect your Social Security or Medicare benefits, and are not taxable.  The loan is repaid when the last surviving borrower passes, sells the home, or essentially no longer lives in the home as a principal residence.

You can receive the money from a reverse mortgage all at once as a lump sum, as fixed monthly payments either for a set term or for as long as you live in the home, as a line of credit, or a combination of these.  The monies from a reverse mortgage are unrestricted and can be used for anything such as daily living expenses, healthcare payments, home repairs and/or upgrades, existing debt pay off or property taxes, or a new car purchase or a “dream” vacation.

For more information on Reverse Mortgage Loans, please feel free to contact us by clicking here, email us at amdirect@alliedmg.com or call: (800)862.5543.