05.13.08
Understanding Reverse Mortgages
For those homeowners who don’t want to sell their current home but need some of the equity released, a reverse mortgage may be a good route to explore. Nathan Johnson, a Xinnix Certified Originator & Reverse Mortgage Specialist with the Cherry Creek Mortgage Company, put together the following information about 
Today’s Reverse Mortgage
What it is:
• A non-recourse loan that allows senior homeowner’s age 62+ to access equity trapped in the home without monthly payments for as long as they own their home.
What the Qualifications are:
• Homeowners must be at least 62, on title, and have equity in their home.
• No credit or income requirements
• Property must appraise and meet minimum FHA and/or lender standards
• Home must be primary residence
What the details of a Reverse Mortgage are:
• The cash received is based on borrower’s age, value and location of home, county or national lending limits, and current interest rates.
• Borrowers can receive a lump sum, monthly payments, a line of credit with a growth rate feature, or a combination tailor fit to the borrowers needs.
• No monthly payments are required, but repayments can be made on the interest or principle and interest.
• Repayment of loan is only required upon borrower’s death, permanent move from home, sale of home, or if home is not maintained to lenders minimum requirements.
Multiple Solutions when using a Reverse Mortgage:
• Pay off your mortgage payment, increase your cash flow
• Help pay for your cost of living- prescription drugs, taxes, medical bills
• Subsidize social security income / pension
• Take a vacation
• Gift money for grandkids education
• Fund Long Term Care Insurance, Life Insurance, Health, Etc.
• Pass on more money to your kids
• Stay in your home as long as you want to
• Maintain your independence
• Cover costs of health care: Chiropractic, Home care, Hospital bills, etc.
