Reverse mortgage loans are a common financial solution for senior homeowners in Georgetown, Texas, to tap into their home equity.
The most popular type of reverse mortgage loan is the Home Equity Conversion Mortgage (HECM) loan. Unless stated otherwise, we’ll refer to HECMs when discussing reverse mortgage loans.
Understanding Reverse Mortgage Loans
Reverse mortgage loans offer homeowners 62 and above the chance to tap into their home equity without having to make monthly mortgage payments. Instead, the borrower simply has to pay property-related expenses such as insurance, taxes and maintenance.
Georgetown, Texas, seniors who want to stay in their homes while gaining extra financial flexibility may find reverse mortgage loans an excellent solution. Borrowers can use the funds from a reverse mortgage loan for virtually any purpose, such as home enhancements, medical bills or going on fun vacations.
People get reverse mortgages in Georgetown, Texas, for many reasons, including:
Flexible Payments
Unlike traditional mortgages, monthly payments are not mandatory with reverse mortgage loans. Instead, the homeowner simply has to cover property-related expenses such as insurance, taxes and home upkeep. The loan balance becomes due when the homeowner sells the property, moves out or passes away.
Borrowers can receive their funds as a lump sum, line of credit, monthly payments or combination.
Leverage Home Appreciation
Given Georgetown’s real estate appreciation over the past few years, homeowners with reverse mortgage loans may benefit from increased property values. As a home’s value rises, so does the available equity, potentially resulting in more significant loan proceeds for the borrower.
Aging in Place
Many seniors use their loan proceeds to renovate their homes for aging in place, make repairs they’ve been putting off or even fund their long-term care (LTC) plans.
Supplemental Retirement Cash Flow
A reverse mortgage loan can serve as a steady source of cash flow for homeowners on a fixed income. Because the money from a HECM is considered loan proceeds, not income, it’s generally tax-free.* Many use their proceeds to protect their retirement assets in down markets and to cover unexpected expenses that arise over time.*
Non-Recourse Loan Protection
HECMs are the only reverse mortgage loans insured by the Federal Housing Administration (FHA). This makes HECMs non-recourse loans, meaning the borrower will never owe more than the home is worth at the time of sale.**
For example, suppose a borrower takes a reverse mortgage loan on their home when the housing market is high. The market is low when they pass away, but their heirs still wish to sell the property. In that case, the Mutual Mortgage Insurance Fund pays the remaining difference (administered by the FHA and financed via Mortgage Insurance Premiums paid by all borrowers). This offers great peace of mind to those concerned about passing debts onto heirs.
Interested in Learning More About Reverse Mortgage Loans?
Complete the form, and we’ll be in touch with you soon!
*This advertisement does not constitute tax or financial advice. Please consult a tax and/or financial advisor regarding your specific situation. **There are some circumstances that will cause the loan to mature and the balance to become due and payable. Borrower is still responsible for paying property taxes and insurance and maintaining the home. Credit subject to age, property and some limited debt qualifications. Program rates, fees, terms and conditions are not available in all states and subject to change.