How mortgage works

how mortgage works

When traveling for business or fun, there’s nothing worse than thinking you have a reservation and learning your hotel reservations been lost, your room has one bed and not two bedrooms, or you thought your check-in time was noon, only to find out it is really 3:00pm. To help avoid these things from happening, there are a few helpful hotel reservation tips seasoned travelers recommend:

Discuss hotel policies prior to making reservations, and verify them at check-in. Some hotels require credit cards at check in for any hotel charges, such as telephone usage, room service, meals in the hotel, or even take -out arranged through the hotel with area restaurants, etc. If a credit card is not available, a cash/check deposit maybe required for any services/fees that may accrue during the hotel stay. Determine when check-in/check-out times are, when cancellation policies go into affect and verify occupancy limits if staying in a room with multiple occupants.

To make clearing security as easy as possible.

-Review the guidelines for liquids and gels on your Flight carriers Carry-On Baggage page before your flight.

-Have your government-issued photo identification and boarding pass ready for inspection.

-Wear shoes that are easy to slip on and off, since all footwear must be x-rayed.

-Remember to place all coats and jackets in a bin for x-ray screening.

-Make your laptop easily accessible for inspection.

-Avoid wearing anything metal or place these items in your carry-on baggage for screening


What Is a Reverse Mortgage (HECM) – How It Works, Pro & Cons

Many seniors struggle to make ends meet each month. At the same time, they often own thousands of dollars of real estate in the form of equity in their home. But unless they take action, that equity remains untouchable, unable to help them out with basic living expense. What’s worse is that mortgage payments further reduce their available cash each month to pay crucial expenses.

A Henry J. Kaiser Family Foundation report states that more than three of four seniors over the age of 65 have equity in their homes ranging from $67,700 to $325,200. One in 20 have home equity greater than $398,500, and 1% have more than $799,850.

And yet almost half of elderly Americans depend upon Social Security for at least one-half or more of their income, while one of eight depend solely on Social Security. But many of these seniors have home equity that could be converted into cash income.

If you or your parents are “house-rich9rdquo; but cash-poor, it is time to consider whether a reverse mortgage on the family home is a better alternative to traditional avenues of converting home equity into a cash asset.

Traditional Methods to Convert Home Equity Into Cash

For seniors who anticipate and desire to live in their current residence for the foreseeable future, there are a few traditional ways (not including the reverse mortgage) to convert home equity into cash:

  • Home Equity Loans. A home equity loan is essentially a loan extended to the homeowner secured by the lender’s receipt of a second mortgage lien on the real estate. The underlying loan may be as high as a 100% of the owner’s equity, depending upon the lender’s criteria, the credit rating of the borrower, and the negotiated repayment terms. For example, a homeowner with equity can usually borrow a lump sum equal to an amount between 80% and 100% of the equity.
  • Home Equity Line of Credit. A home equity line of credit (HELOC) is a line of revolving credit in an amount up to the equity value, usually with an adjustable interest rate, so payment amounts vary from month to month. Like other personal loans, the terms of the loan and the amount of credit that may be available is subject to negotiation between borrower and lender.
  • Cash Out Mortgage Refinancing. As interest rates move lower and/or their equity grows, many homeowners refinance so they can reduce the interest rate on the underlying loan and subsequently reduce their monthly payments or convert a portion of their equity into cash. For example, say a homeowner bought a new home in 2000 for $312,000. The 30-year, 6% fixed rate loan requires a monthly payment of $1,824.40. Today, the home has an appraised value of $350,000 and interest rates have fallen to 3.5%. The owner subsequently refinances the home at a 3.5% rate for 30 years with a monthly payment of $1,582.85. As a consequence of the refinancing, the homeowner pays off the initial mortgage, reduced his payment by over $240, and is able to pull out $30,000 of cash from built-up equity.

Though these methods are a means to access locked equity, they all share a host of disadvantages:

  • Continued Exposure to Real Estate Declines. Since the lender has “full-recourse9rdquo; to the property owner if the mortgage loan is not repaid, the homeowner is liable if the proceeds of the sale of the property are less than the outstanding mortgage. Real estate with a value less than the mortgage is considered to be “underwater,9rdquo; a condition in which many homeowners found themselves following the mortgage securities crisis of 2008-2009.
  • Payments Required for Term of New Mortgage. The homeowner refinancing his home in our example had made almost 14 years of the 30 years of payments. The refinancing – with a new loan – restarts the clock for another 30-year term, essentially adding 14 years of payments to the old due date. Retired seniors may lack sufficient income to comfortably make payments after retiring.
  • Delinquent Mortgage Payments Trigger Foreclosure by Lender. The legal obligation to make payments to the lender exists for the loan term. Failure to make payment can result in foreclosure and sale of the property. If the mortgage is underwater, the seniors not only lose their home, but must make up the difference between sale proceeds and the outstanding mortgage loan.

A reverse home mortgage loan – sometimes referred to as a home equity conversion mortgage (HECM) – is FHA approved for seniors only, and is an increasingly popular method for older homeowners (age 62 and older) to convert excess home equity into a lump sum of cash, a line of credit, or an annuity-like series of regular monthly payments.

The lender that makes the reverse mortgage has a first mortgage lien on the property, but does not receive payments on the loan as in a traditional mortgage, nor is the homeowner liable for any deficiency in value when the lender receives the real estate at the death or move of the homeowner. The beauty in this type of loan is that the borrower receives money from the lender, the amount of which is based on the amount of equity in the home along with other factors, such as age and interest rate. However, since the home is used as collateral on the loan, the lender receives the property upon the death or move of the homeowner. (That said, the homeowner or heirs can pay off the loan at any time and thereby keep the house.)

For example, a reverse mortgage lender agrees to make a first mortgage lien of $150,000 on the homeowner’s house that has a current appraised value of $300,000. However, the homeowner has a previous mortgage loan in place of $100,000. Using the proceeds of the new loan ($150,000), the homeowner pays off the existing mortgage of $100,000, leaving excess proceeds of $50,000. (If the home did not have an existing mortgage, the homeowner’s proceeds would equal the entire $150,000). The homeowner can elect to receive payment in one of the following ways:

  1. Take the $50,000 in cash – what is called a “lump sum payment” – immediately at closing and spend or save it as desired. There are no tax consequences.
  2. Take the $50,000 in a series of monthly payments from the reverse mortgage lender. The payments can be based upon a fixed number of payments or an actuarial calculation for the life expectancy of the homeowner.
  3. Take the $50,000 in the form of a line of credit that can be drawn upon at any time by the homeowner. If the homeowner delays drawing from the line, the mortgage company will reduce the interest charged on the underlying reverse mortgage.
  4. Take the $50,000 in a combination of payments and a line of credit.

The homeowner is never required to make principal or interest payments on a reverse mortgage loan. These characteristics – the payment of money from a lender to the homeowner that is not taxable and does not affect Social Security or Medicare benefits – can especially benefit seniors strapped for cash.

There are several clear-cut eligibility requirements for borrowers to obtain a reverse mortgage.

  • Borrowers must be age 62 or older.
  • The purchased home must be the primary residence of the borrowers.
  • The property must be single family or an FHA-approved condominium.
  • Borrowers have to complete a HUD approved counseling session to ensure they understand the financial costs and legal requirements of the HECM.
  • Borrowers must have the financial capability to pay mandatory expenses such as property taxes, homeowners insurance, and normal maintenance.

The interest rate on mortgage loans, whether conventional or reverse, can be at a fixed or variable rate and is based upon the existing market interest rates and each mortgage company’s business decisions to differentiate itself from competitors. As a consequence, rates usually vary somewhat from lender to lender, just as rates vary for conventional mortgages.

In addition to traditional closing fees, an upfront mortgage insurance premium (MIP) is charged. The fee is equal to 0.5% if the loan-to-value ratio (LTV) is 60% or less, or 2.5% if the LTV is greater than 60%. An additional 1.5% MIP is charged each year. This provides lender protection in case the value of the home declines during the term of the reverse mortgage. It’s worth noting that conventional real estate mortgages do not usually require mortgage insurance if the down payment of the home is 20% or more.

Just as in traditional mortgages, lenders require that homeowners purchase and maintain property insurance, pay property taxes when due, and maintain the property in reasonable condition. Since reverse mortgages differ from traditional mortgages in that there is never a requirement to make payments to the mortgage lender, the loan matures (or can only be called by the lender) under specific conditions referred to as “maturity events,” such as the following:

  • All borrowers have passed away.
  • All borrowers have sold or converted title of the property to a third party.
  • The property is no longer the principal residence of any borrower due to death or a physical or mental condition lasting longer than 12 months.
  • Borrowers refuse to pay property taxes or maintain property insurance and have been given the opportunity to correct the deficiencies.
  • Borrowers refuse or are unable to maintain property in good repair after a process of formal notice and adjudication.

In any such cases, the homeowner (if he or she is alive) or the estate has the option to keep the home by paying off the reverse mortgage loan. If the house is valued less than the mortgage loan at the time the loan is due, the homeowner or executor of the estate takes no action except to facilitate the foreclosure of the home by the lender. The lender then sells the property for as much as possible, applying the proceeds to the outstanding loan.

It’s important to note that if there is cash remaining after the loan repayment, the excess is returned to the estate. If the loan is greater than the sales proceeds, the loss is borne exclusively by the reverse mortgage company.

How Reverse Mortgages Differ From Traditional Mortgage Loans

There are several unusual characteristics of reverse mortgages that differ from traditional mortgages.

  1. The Lender’s Sole Security for a Reverse Mortgage Is the Home Property. Since the homeowner is never required to make mortgage payments, the source of repayment to the mortgage lender is the sale of the property upon the owner’s death or move from the property. By contract, the owner is allowed to remain in the property as long as he or she is living and the home is his or her principal residence.
  2. Homeowner’s Credit Rating or History Is Immaterial. Since the owner is not required to make payments, his or her past or present financial condition is not a factor in the underwriting nor the establishment of the credit rate extended on the mortgage.
  3. Loan-to-Value (LTV) Ratios Are Less Than Found in Traditional Mortgages. Traditional lenders are secured by both the market value of the property and the financial liability of the borrowers. Consequently, some lenders will loan up to 100% of the property’s market value. Reverse mortgage LTV ratios typically range between 50% and 65%.
  4. The Older the Youngest Borrower, the Greater the Loan-to-Value Ratio for Reverse Mortgages. The actuarial life expectancy of the youngest borrower is the basis for calculating the probable term of the loan. However, the loan does not mature until the last living owner dies or moves away from the home. If the owner dies sooner than expected, the loan principal becomes due at that point; if the owner lives longer than the actuarial tables project, the loan is extended until the later death. For example, an 80-year-old woman has 9.61 years of remaining life expectancy while a 70 year-old female would be 16.33 years. In our example, the maximum loan amount for the 80 year-old would be $187,712. The older borrower on the same $300,000 property would receive more than $50,000 than the loan for the younger 70-year-old. In other words, the LTV ratio is higher for super seniors.

Having raised their families by the time they reach retirement age, many seniors seek a smaller housing footprint with lower maintenance and less costs. Prior to the development of the HECM for Purchase Loan – also an FHA-insured loan – seniors who were downsizing and wanted to use a reverse mortgage had to endure two expensive closings: the first on a traditional mortgage to purchase the smaller home, followed by a second refinancing (and closing) using the reverse mortgage proceeds to pay off the traditional mortgage.

Realizing the HECM is an ideal vehicle to finance a new house, maximize cash proceeds to the seniors’ benefit, and eliminate house payments until death or a later move, the FHA approved the HECM for Purchase loan, thus eliminating the hassle and cost of the traditional mortgage closing. In addition to the standard eligibility requirements, it features the following mandates:

  • Any difference between the purchase price of the new home and the HECM loan proceeds must be paid in cash by the borrower at closing. For example, if the home purchase price is $300,000 and the net loan amount after settlement costs is $140,000, the borrowers must have $160,000 in cash to close.
  • Borrowers have to complete a HUD-approved counseling session to ensure they understand the financial costs and legal requirements of the HECM.

While a conventional mortgage on the new property might require less cash on the loan closing than the HECM, it also requires making monthly payments to the mortgage company. For example, costs to close on the $300,000 home purchase with a 80% loan-to-value would be approximately $70,000 ($60,000 down payment + $10,000 closing costs). Funding with an HECM mortgage would cost an additional $90,000 in proceeds ($160,000 – $70,000), but eliminate any future mortgage payments (estimated at $1,200 per month at current interest rates) and losses if the future market value of the house declines. Potential borrowers need to “run the numbers” to determine the best approach for their situation.

Seniors contemplating a reverse mortgage should recognize that it has advantages and disadvantages, depending upon their personal situation, financial condition, and estate desires.

  1. No mortgage loan payments are ever required while an owner is alive and lives on the property.
  2. Reverse mortgage loans do not have a fixed term, but come due only with the occurrence of specific defined events, such as the death of the borrowers.
  3. Neither the reverse mortgage borrower nor his or her estate is at financial risk if the home value falls below or is less than the mortgage loan balance at any time.
  4. The reverse mortgage borrower or his or her estate has an option at any time to repay the reverse mortgage loan and retain house ownership, as with other mortgage loans.
  5. The credit rating of the borrower is not considered in the criteria for making a reverse mortgage loan. A personal bankruptcy of a borrower will not affect the reverse mortgage status if other requirements are met.
  6. Excess equity can be taken in the form of a lump sum, monthly for a set term or amount, as a line of credit, or a combination of all three.
  1. To qualify for a reverse mortgage, the property must be the primary residence of the borrowers.
  2. A reverse mortgage is limited to lower loan-to-market value ratios (50% to 65%) than traditional mortgages, which can be as high as 100% of market value.
  3. The borrower and spouse must be age 62 or older. Reverse mortgages are not available to younger borrowers.
  4. Interest on the reverse mortgage is not deductible for income tax purposes until the loan is paid off.
  5. An upfront mortgage premium is charged – between 0.5% and 2.5%, depending on the loan-to-value ratio – as well as an annual mortgage premium of 1.5%.
  6. Borrowers require prior financial counseling before approval.
  7. Unless the heirs of the reverse mortgage elect to pay off the reverse mortgage, title of the home reverts to the lender and will be sold.

Like a stock that does not pay a dividend or a zero-coupon bond, equity in a home provides no cash to its owner; any increase in equity value is dormant until the asset is sold or the house is refinanced with a greater loan amount.What’s worse is that seniors still making mortgage payments are adding to the amount tied up as equity in their home. In many cases, those funds could better serve them in the form of available cash.

If you or your parents are age 62 and older, the HECM can be a valuable tool in helping you achieve financial security and peace of mind. Remember that the reverse mortgage is not for everyone. Be sure you understand the obligations and rights associated with a reverse mortgage before entering into an agreement.

Have you or any family members taken out a reverse mortgage?


How Does a Reverse Mortgage Work? 2017 Complete Explanation

Reverse mortgages have gotten a lot of much more favorable press lately as much of the hysteria has started to disappear and people are actually looking at the program and what it really does, not what they heard it does from some unnamed source.

All Reverse Mortgage® is going to pull back the curtain and let you see how the reverse mortgage really works. We are a little unique for a reverse mortgage lender in that we don’t believe that the reverse mortgage is right for every borrower. That’s right, we actually believe that there are many folks who should not get a reverse mortgage and we will cover that in this article as well. People used to believe that the reverse mortgage was the loan of last resort. That simply isn’t the case and we will dispel that myth as well.

Let’s start by clearly defining what a reverse mortgage is . A reverse mortgage is a loan. It’s not a government grant program. You are not selling your house to anyone. Just like any other loan, you have certain obligations to maintain your home, to pay your taxes and insurance. The reverse mortgage allows you to stay in your home until the last borrower on the loan (or under the current guidelines, a qualified spouse who is under the age of 62 at the time the loan is obtained and is recognized as a Non-borrowing spouse) permanently leaves the residence. That would mean death or moved out of the house and HUD considers an absence of 12 months or more permanently leaving so vacations, trips to the summer home and short (up to 12 months) stays in the hospital are not considered permanently leaving.

A reverse mortgage is different than a traditional or forward loan in that it operates exactly in reverse. The traditional loan is a falling debt, rising equity loan while the reverse mortgage is a falling equity, rising debt loan. In other words, as you make payments on a traditional loan, the debt or the amount you owe is reduced and therefore the equity you have in the property increases over time. With the reverse mortgage, you make no payments so as you draw out funds and as interest accrues on the loan, the balance grows and your equity position in the property becomes smaller. There is a secret here though that I’m going to let you in on. There is never a payment due on a reverse mortgage but there is also no prepayment penalty of any kind with a reverse mortgage. In other words, you can make a payment if you wish at any time up to an including payment in full without penalty. Many borrowers choose to repay some or all of the accruing interest or whatever amount they desire, the choice is the borrowers but there is no payment required.

A reverse mortgage loan amount is determined differently than a standard or forward mortgage and you don’t hear people talking about the “Loan to Value Ratios” like you would on a traditional loan. On a traditional loan, the lender agrees to lend a set amount that is determined as a percentage of the value of the home and can change based on a number of factors including borrower’s credit, the required loan amount, the property type, etc. With a reverse mortgage, there are a number of factors input into a calculator and the borrowers’ benefit amount or Principal Limit are determined based on the borrowers’ age(s), the value of the home or the HUD lending limit (whichever is less), and the interest rates in effect at the time. From the Principal Limit any costs to obtain the loan are subtracted, any existing mortgages and liens must be paid in full and any remaining money is the borrowers’ to do with as they please. The current HUD lending limit is $636,150 .

Because borrowers are not required to make any payments, the interest accrues on the balance and the entire loan is paid back when the last borrower permanently leaves the home, the younger a borrower is, the less they will receive under the program based on the HUD calculator. All borrowers have to be a minimum of 62 years of age. The Principal Limit is determined based on the age of the youngest borrower on the loan because the program uses actuarial tables to determine how long borrowers are likely to continue to accrue interest. ( Link to HUD.Gov HECM Actuarial Review )

If there are multiple borrowers, then the age of the younger borrower will lower the amount available even when an older borrower is also on the loan because the terms allow all borrowers to live in the home for the rest of their lives without having to make a payment. Of course there will always be exceptions, but the premise is that a 62 year old borrower will be able to accrue a lot more interest over his/her life than an 82 year old borrower with the same terms and so the HUD calculator allows the 82 year old borrower to start with a higher Principal Limit.

There are a number of different ways borrowers can opt to take the funds available to them on a reverse mortgage. They can take a lump sum draw of the funds available to them (and I will get into this further in a minute), they can get a line of credit that they can access as they choose, they can get a payment for a set amount and period of time known as a Term payment or can opt for a Tenure payment which is a guaranteed payment for life as long as they live in the home. In addition to these options, they can use a modified version of each and “blend” the programs if you will.

For example, a borrower in California born in 1951 owning a $385,000 home that has no mortgages may decide it’s time to get a reverse mortgage. Our borrower would like $50,000 at closing to make some changes to the property and to fund a college plan for her grandchild. She has additional income that she will begin receiving in 4 years but until then, would like to augment her income by $1,000 per month. She can take a Modified Term loan with a $50,000 draw at closing and set up the monthly payment for 4 years of $1,000 per month. That would leave her an additional $107,000 in a line of credit that she would have available that she could use or not, completely her choice. If she does not use the line, she does not accrue interest on any funds she does not use and the line of credit grows on the unused portion.

This credit line growth is what all the folks, including financial planners, are really starting to sit up and take notice of. Let’s go back to the $200,000 credit line shown above. As we discussed earlier, many people considered the reverse mortgage the loan of last resorts in the past. But let’s consider another borrower who is a savvy planner and is planning for her future needs.

She has the income for her current needs but is concerned that she may need more money later. So she obtains her reverse mortgage and has that same $200,000 line of credit available to her after her costs to obtain the mortgage. Her line of credit is growing at the same rate on the unused portion of the line as she would have been accruing all interest and mortgage insurance premium had she borrowed the money.

If rates don’t change, in 10 years that line of credit available to her would be over $350,000. In 15 years that line would grow to almost $500,000 and in 20 years when she may need the funds the most, her line would have more than $660,000 available to her. If interest rates go up 1% in the third year and one more percent in the 7th year, after 20 years the borrowers available line of credit would be over $820,000.

Now this is not income, it’s not interest that anyone is paying to you and if you do borrow the money, you owe it and it will accrue interest once you do borrow the funds. You or your heirs would have to pay it back when the property sells. But where else can you ensure that you will have between $660,000 and $800,000 available to you in 20 years? The calculator is shown below and you can see the very modest rate increases used. If the accrual rates rise more, the growth rate will be higher.

The fixed rate option requires borrowers to take a lump sum draw, meaning borrowers must take the full draw of all the money available to them at the close of the loan. They cannot leave any funds in the loan for future draws (there are no future draws allowed with the fixed rate). The reason for this is also because of growth of the line.

As you can see, the growth rate can be quite substantial and if there were many borrowers with yet unused funds who borrowed at low fixed rates but wanted to finally access their funds years later after rates had risen, borrowers would have substantially higher funds available to them at rates that were not available and reverse mortgage lenders might not be able to cover the demand of below market requests for funds. Therefore, HUD stopped the fixed rate line of credit when some lenders attempted to offer the product over a year ago.

Due to the fact that borrowers experienced a much higher default rate on taxes and insurance when 100% of the funds were taken at the initial draw, HUD changed the method by which the funds would be available to borrowers which no longer allows all borrowers access to 100% of the Principal Limit at the close of the loan.

The new parameters coincide with how much of the money is needed to pay off existing loans and liens on the property. HUD calls these necessary payoffs “mandatory obligations”. Borrowers have access to up to 100% of their principal limit if they are using the funds to purchase a home or to pay mandatory obligations in conjunction with the transaction. Borrowers can also include up to 10% of the principal limit in cash (up to the maximum Principal Limit) to be paid to the borrower above and beyond the mandatory obligations if needed so that the borrower can still get some money at closing. Let’s use some round numbers for examples to illustrate this. If a borrower has a $100,000 principal limit and they have no loans/liens on their home, they can take up to 60% or $60,000 of their proceeds at closing or any time in the first 12 months of the loan. The remaining $40,000 is available to the borrower any time after 12 months .

This is where the fixed rate loan starts to impact borrowers the most now. If you do not have existing liens to pay off, you would lose the availability of the remaining funds after the initial draw. In other words, in our example, the fixed rate borrower would receive the $60,000 but since the fixed rate is a single draw, there would be no further access to funds and so they would not be able to receive the additional $40,000 and would forfeit those funds. If the entire $100,000 was being used to pay off an existing loan, either program would work equally well because all the money would be required to pay off the mandatory obligation (the existing loan) and HUD allows that.

There is mortgage insurance on all government insured reverse mortgages consisting of the Up Front Initial Mortgage Insurance Premium (IMIP) and the annual renewal. Borrowers who are limited by HUD or who qualify for more but agree to limit themselves to 60% of their Principal Limit in the first 12 months pay a premium of 0.5% for the IMIP whereas borrowers who require more than 60% of their principal limit in the first 12 months must pay an IMIP of 2.5% of the property value or the HUD maximum lending limit of $636,150, whichever is less.

Going back to our example, the property value to get the $100,000 Principal Limit might be $190,000 and so the IMIP at the lower level equates to $950.00 while the premium for a borrower who requires more than 60% would be $4,750 – 5 times that amount. If that same borrower has loans and fees in the amount of $55,000 to pay off, the program will allow the borrower to take 60% in the first year or the mandatory property charges plus 10% of the Principal Limit (in this case, $10,000).

HUD allows the borrower to take $10,000 at closing, but if the borrower agrees to limit the availability of cash to the 60% level in the first 12 months, there would be less money available in the first 12 months, but the borrower would pay almost $4,000 less in fees and would have all that money available after 12 months’ time – literally on day 366.

With regard to pricing, reverse mortgage lenders are now more willing than ever to help pay costs whenever they can on reverse mortgages. Especially if you have a loan that you are paying off, there is often some room in the value of the loan for the lender to be able to make back money they spend on your behalf when they sell the loan and lender credits are allowed by HUD. Shop around and see what is available. Education is the key and knowing your goals will help you procure a loan that is best for your circumstances.

A very low margin will accrue the least amount of interest once you start using the line, but if you are looking for the greatest amount of line of credit growth, a higher margin grows at a higher rate. And getting the least amount of fees on your loan won’t help you if you plan to be there for 20 years and in that 20 years the interest will cost you tens of thousands of dollars more and your goal was to preserve equity. Knowing what you want out of your reverse mortgage will help you choose the option that actually gets you there.

And finally, I told you that we do not recommend reverse mortgages for everyone. If a reverse mortgage does not meet your needs and you are still going to be scraping to get by, you need to face that fact before you begin to use your equity. If the costs of the mortgage will be almost as much as you will receive from the loan due to the fact that you live in an area where closing costs are very high and your property value is less than $40,000, you need to think hard about whether or not you want to use your equity on such an endeavor.

If the mortgage doesn’t make your life easier and you’re thinking that you are just going to have to sell in a few years anyway, again, consider making that move now before you begin to erode your equity and the next move becomes harder. The reverse mortgage is supposed to be the last loan you will ever need and if you know this is not your forever home, consider using your reverse mortgage to buy the right house instead of as a temporary solution that is not a true solution at all.

By and large, most borrowers can benefit when they do their research and plan carefully but you need to know how they work, what your plans are and which options will best achieve your goals. Education is the key and don’t be afraid to compare. If you didn’t before, hopefully you now know how they work and are on your way to determining if a reverse mortgage is right for you.

“How does a Reverse Mortgage Work” by the experts at All Reverse Mortgage® We’re here to answer your questions! If you have an inquiry about how the reverse mortgage can work into your retirement plan give us a call Toll Free (800) 565-1722 or request request your quote here.

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