During the past several years, reverse mortgages have become more of a popular loan program enabling seniors 62 years of age and older to remain in their home or upgrade to a home they thought they couldn’t afford.  Essentially, a reverse mortgage is a non-recourse loan that allows senior homeowners, age 62 years or older, to convert home equity into cash or purchase a home of greater value. They can do this:

• Without leaving their homes
   

• Without income qualification
   

• Without making monthly mortgage payments
   

• Without having to repay the loan until they move out permanently, sell the house or pass away
   

• Can be paid in a lump sum payment, monthly payments, line of credit or combination thereof
   

• Interest may be tax-deductible upon loan repayment  

How a Reverse Mortgage works:

• Loan proceeds available to the borrower are based on three main factors:
  
  1.  Age of homeowner(s) (youngest must be 62)
  2.  Value and location of home
  3.  Current interest rates
   

• Loan is repaid upon permanent move out, and repayment never exceeds value of home
   

• Amount repaid is principal, accrued interest and service fees

In summary, we at Vision Mortgage Capital feel a reverse mortgage is all about maintaining and improving the quality of life. The first thing to consider is why does the consumer want to do this? Even if they have cash, stocks, long term investments, etc., a reverse mortgage becomes a non-taxable event and allows seniors the ability to preserve other assets. It’s another option for them and their financial advisors to consider when planning for their retirement years.  We would welcome the opportunity to answer any questions you may have regarding reverse mortgages.

Bill Pearson
Gateway Funding