What is a Reverse
Mortgage… in plain
English
By All Reverse Mortgage®
(800) 565-1722
www.allrmc.com
© Copyright All Revers...
Before you can
learn what a
reverse mortgage
is,
let us start by
talking about what
it is NOT.
© Copyright All Reverse Mor...
Reverse mortgages are
NOT:
• Just for the desperate
• A trade for your home
ownership
• Free money from the
government or ...
In plain English, a reverse
mortgage is nothing more than
an equity loan secured by your
home which is designed to
defer t...
The most common type of reverse mortgage is
the HECM, which is the acronym for Home
Equity Conversion Mortgage.
This produ...
As long as the homeowner still resides
in their property and pays their property
taxes and insurance they can take
advanta...
You own your home
With a reverse mortgage you continue to own
your home, paying your property taxes and
homeowners insuran...
What are the
qualifications?
Reverse mortgages are available to all US
citizens and Permanent Residents age 62 or older
wi...
You’re in the driver’s seat
You can choose to make voluntary repayments of the mortgage
interest in part or full without p...
How is the loan repaid?
Unless repaid voluntarily, the reverse mortgage is not due until
the last surviving borrower passe...
Who is it for?
Anyone who has desires or needs that cannot be met with
their current income levels. Reverse mortgages are ...
Who is it NOT for?
Because there are typical costs associated with setting up
a reverse mortgage, (appraisal and originati...
What about taxes?
Cash received by any mortgage is not considered income
and will not be taxed.
© Copyright All Reverse Mo...
Required counseling
The Federal Housing Administration wants you to fully
understand the reverse mortgage and requires tha...
Other considerations
Even though reverse mortgages do not affect public benefits
such as Social Security and Medicare, the...
The experts at All Reverse
Mortgage® are here to help! If you
have a question about reverse
mortgages give us a call Toll ...
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What is a Reverse Mortgage… in plain English

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Before you can learn what a reverse mortgage is, let us start by talking about what it is NOT. 

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What is a Reverse Mortgage… in plain English

  1. 1. What is a Reverse Mortgage… in plain English By All Reverse Mortgage® (800) 565-1722 www.allrmc.com © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  2. 2. Before you can learn what a reverse mortgage is, let us start by talking about what it is NOT. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  3. 3. Reverse mortgages are NOT: • Just for the desperate • A trade for your home ownership • Free money from the government or any other type of entitlement program © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  4. 4. In plain English, a reverse mortgage is nothing more than an equity loan secured by your home which is designed to defer the mortgage interest. It’s as simple as that. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  5. 5. The most common type of reverse mortgage is the HECM, which is the acronym for Home Equity Conversion Mortgage. This product was created by the Federal Housing Administration in 1989. While a traditional home mortgage requires the homeowner to make scheduled monthly payments over a specified term, (usually 30 years) the reverse mortgage interest is not due until the loan reaches maturity. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  6. 6. As long as the homeowner still resides in their property and pays their property taxes and insurance they can take advantage of not making monthly payments on the money they borrowed. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  7. 7. You own your home With a reverse mortgage you continue to own your home, paying your property taxes and homeowners insurance just as before. Like any mortgage, you will receive a monthly statement which will outline all interest charges and balance information. The only difference will be the absence of a coupon to return your monthly payment as no payment is necessary. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  8. 8. What are the qualifications? Reverse mortgages are available to all US citizens and Permanent Residents age 62 or older with substantial equity in their home. The maximum loan amount you may qualify for is based on the youngest homeowner’s age, current rates, and home value. There is no income or credit score requirements as there are no monthly repayments. You must continue living in your home as your primary residence and continue to pay your properties taxes and insurance. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  9. 9. You’re in the driver’s seat You can choose to make voluntary repayments of the mortgage interest in part or full without penalty. That’s right; you can make payments back on your reverse mortgage. You can also deduct that mortgage interest just as you would a traditional home loan and you can pay off the entire loan at any time with cash, refinancing or selling. Some believe that once you get a reverse mortgage the bank will eat all of the homes equity leaving your heirs with nothing but a mound of debt. Wrong. While no one can predict your homes appreciation, you can rest assured that your heirs have no recourse to the reverse mortgage you took. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  10. 10. How is the loan repaid? Unless repaid voluntarily, the reverse mortgage is not due until the last surviving borrower passes away or fails to occupy the property as their primary residence. The heirs will have ample time (up to 12 months) to complete a sale or refinance transaction to pay back the balance of the loan. If your heirs choose not to act, the reverse mortgage lender will have no choice but to foreclose on the home. In the event that the sale of the property does not yield sufficient funds to pay off the balance of the loan, the government insurance that you would have paid for as a part of closing your reverse mortgage loan will cover your estate. The Lender will be reimbursed for any shortfall from the Mortgage Insurance fund. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  11. 11. Who is it for? Anyone who has desires or needs that cannot be met with their current income levels. Reverse mortgages are a great tool to help you stay in the home you love or to simply enhance your retirement years. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  12. 12. Who is it NOT for? Because there are typical costs associated with setting up a reverse mortgage, (appraisal and origination charges) it is not recommended for people who do not intend to live in their home for a reasonable amount of years to realize its benefits. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  13. 13. What about taxes? Cash received by any mortgage is not considered income and will not be taxed. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  14. 14. Required counseling The Federal Housing Administration wants you to fully understand the reverse mortgage and requires that all applicants receive independent 3rd party counseling by phone or in person. Once the counseling is completed you will receive a certificate of completion which is then signed and delivered to your lender of choice. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  15. 15. Other considerations Even though reverse mortgages do not affect public benefits such as Social Security and Medicare, the cash proceeds can impact eligibility for those who are receiving “needs based” state or local assistance. This is not specific to a reverse mortgage but as to any excess funds that could change the qualifications on these types of programs. Like any mortgage it pays to shop around. Compare offers from both banks and brokers alike and don’t be fooled by the common sales pitch “they’re all the same” or “we service our own loans”. The fact of the matter is ALL reverse mortgages carry the same safeguards, and there is only one federally insured HECM so don’t settle for less money or higher interest charges. © Copyright All Reverse Mortgage Company | Phone (800) 565-1722
  16. 16. The experts at All Reverse Mortgage® are here to help! If you have a question about reverse mortgages give us a call Toll Free (800) 565-1722 Created by Cliff Auerswald www.allrmc.com © Copyright All Reverse Mortgage Company | Phone (800) 565-1722

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