How A Reverse Mortgage Works
Rick May describes the Reverse Mortgage process
How Does A Reverse Mortgage Work?
How a reverse mortgage works is really not a mystery.
Here’s a question to ask yourself: What could you do if you could eliminate your mortgage payment or if you had additional cash flow? Whether you want to have more money to enjoy your life, help support a loved one or pay off bills and medical expenses, a reverse mortgage can give you immediate access to more money – your money!
Rick believes that it all starts with education. According to Rick, “My reverse mortgage clients must know the pros and cons and learn the truths about how the HUD reverse mortgage works. Then, and only then can they make an informed decision.”
The process of getting your reverse mortgage will be a lot like getting any other home loan you’ve had. However, the advantage of a reverse mortgage is that you’re never required to make a payment on the loan while you live in the home. It is our goal to help you understand every step of the reverse mortgage process. Your current loan (if you have one) will be paid off with your new reverse mortgage, totally eliminating any current mortgage payment you have! If you have additional equity, you may be able to access that money – tax-free! If your home is already paid off, you can use a reverse mortgage to access the equity you have worked so hard to build.
As the homeowner(s), you can choose from one of four ways to receive the additional funds from your reverse mortgage:
- As a monthly payment -wired into your account at the beginning of each month,
- In one lump sum amount,
- As a line of credit, or
- Any combination of these options.
Since reverse mortgages don’t require you to make monthly payments, the mortgage amount you owe grows larger over time. It’s important to note that your home may continue to appreciate just the same as if you had a regular mortgage, increasing your home equity as time progresses.
As a Reverse Mortgage borrower, you will retain your place on the property’s title and continue to own your home.
As the homeowner, you’ll still be responsible for property taxes, insurance, and maintaining your home. But no repayment is required until you no longer occupy the house. Watch our video in the Learning Center on “What Happens at the End of the Loan?” to learn more.