An agent will assess your unique situation by completing a free financial assessment and determining how much you may be eligible to receive from a Reverse Mortgage or HECM.
Work with a Lend Smart Reverse Mortgage Expert to walk you through the process of what you’ll need to be ready for counseling and what you need to have ready before applying.
Be Smart, Choose Lend Smart. Scroll down to begin your path of a Reverse Mortgage with Lend Smart Mortgage.
WHAT IS A REVERSE MORTGAGE?
What is a reverse mortgage? In the simplest terms, a reverse mortgage, is a home equity loan that can create liquidity for older homeowners and that does not need to be repaid until the borrower moves, sells the house, passes away or otherwise no longer occupies the home as their primary residence. The loan amounts are determined by a formula based on 3 factors:
- The home’s appraised value or lending limit
- The youngest borrower’s age, or Non-Borrowing Spouse’s age.
- The current interest rates.
Reverse mortgages were specifically designed to help seniors, aged 62 and older, convert equity into cash that could be used to supplement a fixed retirement income, pay for medical and other daily expenses, make home repairs to help with aging in place or to purchase a new home.
At Lend Smart Mortgage we believe that after spending your career supporting your home that in retirement, your home can begin to support you. With years of experience and with the help of financial planning experts, we’ve learned reverse mortgages can be a versatile, practical and beneficial tool in any comprehensive retirement income plan.
WHAT is a Home Equity Conversion Mortgage or HECM?
Home Equity Conversion Mortgage or HECMs are a type of reverse mortgages that are insured by the Federal Housing Administration (part of the U.S. Department of Housing and Urban Development, also known as HUD). Since its inception in 1989, more than one million American senior households have benefitted from a HECM. Most reverse mortgages made today are FHA-insured. That means they are subject to the FHA’s loan limit of $679,650, and other restrictions for home type and condo approval. Today, many lenders also offer proprietary loans including “jumbo” reverse mortgages for high value homes and with less restrictive approval processes for condos. At Lend Smart Mortgage we work with top Lenders to be able to offer a wide variety of Reverse Mortgages to you so that we can make sure we have the product that fits your unique situation and retirement plan best.
WHAT are the advatages of a Reverse Mortgage?
What makes reverse mortgages a great way to access home equity? In a word, flexibility. Borrowers can choose how they want to receive loan proceeds:
- As a lump sum
- Term payments – Regular monthly payments for a set period of time
- Tenure payments – monthly payment that continues for as long as you reside in your home, regardless of how long that is
- A line of credit that you can draw from at any time
- Or some combination of the above.
No restrictions, borrowers can use loan proceeds to pay off an existing mortgage, make home improvements and modifications, bridge funding gaps to delay collecting Social Security, protect investments, meet unanticipated expenses of aging such as medical emergencies or caregiving needs, or just to have the piece of mind of knowing they have easy access to their homes equity when needed.
HECM or HELOC?
How does an HECM line of credit compare to a typical home equity line of credit? HECMs were designed specifically for seniors and carry certain advantages over HELOCs.
- HECM financial requirements are often less restrictive for a retiree or self-employed worker than a HELOC
- HECM does not require monthly principal or interest payments. Most HELOCs will require a monthly payment during the draw period and then an increased payment once it resets.
- Unlike a HELOC, a HECM line of credit will never be frozen or reduced, even if the property value decreases.
- Growth! One of the most innovative aspect of the HECM is the line of credit growth feature that applies to the unused portion of the LOC. The unused portion increases the amount you can borrow over time.
WHAT IS the risk of a Reverse Mortgage?
Are there any risks involved in taking out a reverse mortgage? There is always some risk with any financial product, however, the HECM program includes many consumer protections and was specially designed to help seniors age in place.
- All HECM lenders follow HUD’s guidelines including limitations on origination fees
- All applicants must have an assessment of their finances to ensure that they are able to maintain home owner’s insurance and property tax payments to prevent default
- All borrowers must attend a pre-application counseling session conducted by an independent HUD approved counseling agency.
- What’s more, the HECM is a non-recourse loan—which means that when the home is sold, the borrower or estate does not have to repay more than the home’s current appraised value, even if the loan balance exceeds that amount.