Reverse mortgage loans are a financial option for seniors living in Pflugerville, Texas, who want to unlock their home’s equity.
The most common type of reverse mortgage loan is the Federal Housing Administration (FHA)-insured Home Equity Conversion Mortgage (HECM) loan. Unless noted otherwise, we’re referring to HECMs when discussing reverse mortgages.
How Does a Reverse Mortgage Loan Work?
Reverse mortgage loans enable eligible homeowners to access a portion of their home’s equity without the obligation of monthly mortgage payments. Instead, the borrower is only responsible for property-related expenses such as insurance, taxes and maintenance.
Reverse mortgage loans are popular among Pflugerville, Texas, seniors aiming to remain in their homes and gain additional financial flexibility. Borrowers can apply the funds from a reverse mortgage to virtually anything but often see use for home renovations, travel and enjoying life.
People get reverse mortgages in Pflugerville, Texas, for many reasons, including:
No Monthly Mortgage Payments
Unlike traditional mortgages, monthly payments are not mandatory with reverse mortgage loans. Instead, the homeowner only needs to cover property-related expenses such as insurance, taxes and home upkeep.
Borrowers can receive their funds as a lump sum, line of credit, monthly payments or combination with FHA insuring. The loan balance becomes due when the homeowner sells the property, moves out or passes away.
Potential for Home Value Appreciation
Pflugerville’s real estate market has risen dramatically in value over recent years, which means that homeowners with reverse mortgage loans may benefit from increased property values. As a home’s value rises, so does the potential equity, which can result in more significant loan proceeds for the borrower.
Aging in Place
Reverse mortgage loans can allow seniors to age more comfortably in their homes. Many use their proceeds to protect their retirement assets in down markets and to cover unexpected expenses that arise over time.* This can be especially beneficial in Pflugerville, Texas, where the cost of living and housing prices may be higher than in neighboring areas.
Enhancing Retirement Finances
Because the money from a HECM is considered loan proceeds, not income, it’s generally tax-free. This makes reverse mortgage loans a potential source of tax-free cash flow to supplement Social Security, pensions or other retirement finances.* Many use their proceeds to protect their retirement assets in down markets and to cover unexpected expenses that arise over time.*
Non-Recourse Loan Security
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.
Considering a Reverse Mortgage Loan in Pflugerville?
Fill out the form and we will be in touch!
*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.