Reverse MortgageROBERT HILTS

Standard Mortgage A debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. 

1. Acquire Loan

2. Purchase Home

3. Pay predetermined payments dependent on home value, interest rate and length of loan.

What is a Reverse Mortgage ? A reverse mortgage is loan available to homeowners who are 62 years or older that enables them to convert part of the equity in their home into cash.

The loan is called a reverse mortgage because the traditional mortgage payback stream is reversed. Instead of making monthly payments to a lender, the lender makes payments to the borrower.

Loan proceeds can be taken as a lump sum, as a line of credit or as fixed monthly payments, either for a fixed amount of time or for as long as you remain in the home. You can also combine these options, for example, taking part of the proceeds as a lump sum and leaving the balance in a line of credit.

Interest = 5.06%

Principal = $108,400

Interest = $91,600

Fees

Lump Sum Payment

Monthly Payments

Interest Accrued

Reasons For a Reverse Mortgage A traditional mortgage is a balloon full of air that loses some air and gets smaller each time you make a payment. A reverse mortgage is an empty balloon that grows larger as time passes.

1. Pay off Existing Mortgage

2. Additional Income Per Month

Ending of Mortgage/ Limitations You are not required to pay back the loan until the home is sold or otherwise vacated. As long as you live in the home, you are not required to make any monthly payments towards the loan balance, but you must remain current on your property taxes, homeowners insurance and condominium fees (if you live in a condo).

Conveyance of the mortgaged property by will or operation of law to the estate or heir after mortgagor's death: When a reverse mortgage becomes due and payable as a result of the borrower's death and the property is conveyed by will or operation of law to the estate or heirs (including a surviving spouse who is not on title and therefore not obligated on the HECM note) that party (or parties if multiple heirs) may satisfy the HECM debt by paying the lesser of the mortgage balance or 95% of the current appraised value of the property.

Resources/References1. http://www.reversemortgage.org/About.aspx

2. https://www.youtube.com/watch?v=KYaZbY5bBCM