Reverse Mortgage

Many times as a family member begins to age in their home, they are in need of the help of a paid caregiver. The cost to a senior citizen who must pay a caregiver in order to remain in their residence can be daunting. Their home is their biggest asset, yet it is illiquid. There is a way to tap the equity in one’s residence so that the senior citizen can remain in his or her home while also paying the ever increasing bills for their cost of care. A reverse mortgage allows a senior citizen who has attained the age of 62 years to draw on 60 and 70% of the equity in the home to pay for the senior citizen’s cost of living and care. In most situations, they can use the funds when needed like an equity line of credit. Interest accrues on the funds as they are borrowed. The interest will accumulate over the term of the reverse mortgage. When the residence is ultimately sold, the balance due will be paid in full at the time of sale of the home. The risk is to the lender if in fact the loan is not paid in full at the time of the sale of the property. Under no circumstances can the senior citizen, their estate, or the family be held liable for any shortfall which may be due and owing on the mortgage balance.

The reverse mortgage is only available to a person over the age of 62 years and must be made on their primary residence. If the senior citizen no longer permanently occupies the home, the family will be required to notify the mortgage lender and sell the residence within a one year period . As a borrower, you must remember that you are required to remain current on your real estate taxes and homeowners insurance. The property must be well maintained and kept in good condition. The holder of the reverse mortgage will maintain the primary lien on the property. It is important to work with a very knowledgeable reverse mortgage expert when deciding whether to implement this mortgage. At the same time, it is a great way to unlock the equity built up in the residence in order to remain in the home as you age.

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