Reverse mortgage loans are a popular financial solution for senior homeowners in Round Rock, 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 is responsible for property-related expenses such as insurance, taxes and maintenance.
Round Rock, 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 simply enjoying retirement to the fullest.
Advantages of Reverse Mortgage Loans
Flexibility With Monthly 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.
Potential for Home Appreciation
Given Round Rock’s real estate appreciation over the past few years, homeowners with reverse mortgage loans may benefit from increased property values. Remember, as a home’s value rises, so does the available equity, potentially resulting in more significant loan proceeds.
Supplemental Retirement Cash Flow
A reverse mortgage loan can serve as a steady source of cash flow. 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 a Reverse Mortgage in Round Rock, Texas?
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.