Finding Financial Freedom in Your Golden Years
The golden years of retirement should be a time of relaxation and enjoying the rewards of one’s labor. However, financial challenges can sometimes cast a shadow over this period. If you’re 62 or older and have equity in your home, a reverse mortgage could be the lifeline you’ve been seeking.
Unlike conventional loans, a reverse mortgage enables homeowners to access the value of their property without the burden of monthly mortgage payments. Instead, the lender provides you with payments, offering a financial cushion to enhance your retirement experience.
By flipping the traditional mortgage model, reverse mortgages provide retirees a way to supplement their income by leveraging their home’s value. Following an appraisal, a segment of the home’s equity becomes accessible to the homeowner. This portion can initially be utilized to pay off any existing mortgages. The remaining funds can be received as a lump sum, monthly payments, or a combination of both, tailored to the homeowner’s individual preference.
However, there are some stipulations. Homeowners must continue paying property taxes, insurance, and maintain their home to keep the loan in good standing. Furthermore, the loan amount grows over time due to accumulating interest. The silver lining with a Home Equity Conversion Mortgage (HECM) is that you will never be required to repay more than the value of your home. This protection is due to its non-recourse nature, providing peace of mind for borrowers.
The loan becomes due when the homeowner sells the property, moves out, or passes away. In the latter case, heirs have options to retain the property or sell it to settle the loan.
In a regular mortgage, homeowners make payments to the lender. In a reverse mortgage, the lender makes payments to the homeowner.
Upon selling the home, the proceeds will initially go towards repaying the reverse mortgage. Any surplus amount is then retained by the homeowner or passed on to their heirs.
It might. While the funds from a reverse mortgage aren’t taxable, they could impact eligibility for need-based government programs.
If you have a HECM, you won’t owe more than your home’s worth, regardless of market fluctuations.
Yes, there are no restrictions on how you can use the funds, but it is wise to use them for necessary expenses and saving for retirement.
It’s an opportunity to capitalize on a home’s value without the constraints of monthly mortgage payments. But like all financial tools, it’s essential to understand its nuances and ensure it aligns with your retirement vision. If you’re contemplating a reverse mortgage or exploring other financial avenues, connect with your Nationwide Mortgage Bankers (NMB) Loan Officer. They can provide insights tailored to your situation, helping you make an informed decision for a more comfortable retirement.
*All product information represented on this page is subject to product guidelines and can change at any time. It is for educational and informational purposes only and not a commitment to lend. Please contact your Own It Home Loans Loan Officer today to get the latest product guidelines and guidance on what loan programs fit your unique financial picture and goals.
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Nationwide Mortgage Bankers, Inc. (NMB), going by NMB Home Loans, Inc. in the states of AL, AZ, GA, IL, IA, KS, LA, MN, MT, ND, OK, PA, SC, SD, TX, WV and as NMB Home Loans in KY and MA| NMLS# 819382 | (www.nmlsconsumeraccess.org) 3 Huntington Quadrangle, Suite 403N, Melville, NY 11747 | Branch NMLS 1822931 | (833) 700-8884 | www.nmbnow.com. NMB is in no way affiliated with Nationwide Mutual Insurance Company. “NMBNOW” is a registered DBA of Nationwide Mortgage Bankers, Inc. All loans are subject to credit and appraisal approval. Not all applicants may qualify. Some products and services may not be available in all states. NMB is not acting on behalf of or at the direction of FHA/HUD/USDA/VA or the federal government. This is an advertisement. Americasa; Americasa Home Loans; Americasa Mortgage; are registered DBAs of Nationwide Mortgage Bankers, Inc (“NMB”). Licensed under the California Finance Lenders Law by The Department of Financial Protection and Innovation #60DBO73939 | Georgia Residential Mortgage Licensee | MA Mortgage Lender License #ML819382 | Licensed by the N.J. Department of Banking and Insurance | Licensed Mortgage Banker – NY Department of Financial Services. | Rhode Island Licensed Lender | Licensed by the Virginia State Corporation Commission. Additional state licensing information can be found at https://nmbnow.com/disclosures-and-licensing/
