A reverse mortgage loan allows seniors age 62 and above access to the cash equity they have built up in their home. Team Mortgage Company specializes in reverse mortgage loans and helping you to understand how these loans can benefit you and your family.
Several different reverse mortgage loan products exist. Fannie Mae Home Keeper, Jumbo Cash-Out Loan, and the HUD-insured Home Equity Conversion Mortgage (HECM) remain the most common.
A reverse mortgage loan works differently than a traditional home loan — allowing you to borrow money from a lender — with the lender making monthly payments to you, rather than the other way around. In addition, all interest is paid at the end of the loan, rather than in the beginning.
Reverse Mortgage Loans offer many advantages, including:
- Strengthen your personal and financial independence
- Help pay for medical and preventative health care costs or other needs
- You won’t lose your home in foreclosure if you pay your property taxes and insurance,
and maintain the property according to the loan terms - The loan is paid off when the home is sold by you or your heirs, or if all borrowers move out
- In many cases, you can still keep your Medicare or Social Security benefits,but please consult with your benefits specialist first.
- The loan can be used as a credit line that you can draw upon when needed
- You will be able to receive all of your cash right away
- Get the best of both worlds — receive cash now and have a reserve balance to use as credit
- No income needed: homeowner does not need to work and is not qualified based on income
As the homeowner receives monthly cash income, the loan balance increases. In the following twelve-month example, the homeowner begins with a debt-free home. As the homeowner receives cash, the mortgage grows. By the end of month twelve, the homeowner owes the bank $6,000 plus $232.44 interest. All Reverse Mortgage loans have a variable rate.
Assumptions*
| Regular monthly advances | $500.00 |
| Annual interest rate | 7.0 Percent |
| Monthly interest rate | .583% (.07/12) |
| Month | Beginning Balance | Interest | Ending Balance | Cash Disbursement |
| 0 | 0 | 0.00 | 0.00 | $500.00 |
| 1 | $500.00 | $2.92 | $502.92 | $500.00 |
| 2 | $1,002.92 | $5.85 | $1,008.77 | $500.00 |
| 3 | $1,508.77 | $8.80 | $1,517.57 | $500.00 |
| 4 | $2,017.57 | $11.77 | $2,029.34 | $500.00 |
| 5 | $2,529.34 | $14.75 | $2,544.09 | $500.00 |
| 6 | $3,044.09 | $17.76 | $3,061.85 | $500.00 |
| 7 | $3,561.85 | $20.78 | $3,582.63 | $500.00 |
| 8 | $4,082.63 | $23.82 | $4,106.44 | $500.00 |
| 9 | $4,606.44 | $26.87 | $4,633.31 | $500.00 |
| 10 | $5,133.31 | $29.94 | $5,163.26 | $500.00 |
| 11 | $5,663.26 | $33.04 | $5,696.29 | $500.00 |
| 12 | $6,196.29 | $36.15 | $6,232.44 | $500.00 |
*Many criteria are considered when determining the reverse mortgage loan amount, interest rate, etc. These materials are not from HUD or FHA and were not approved by HUD or a government agency.
For more information about reverse mortgage loans from the experts at Team Mortgage Company, contact us here or call us at 616.974.9710.
