What is a Reverse Mortgage?

Over the past several years, reverse mortgages have grown in popularity. Texas is one of the top states for reverse mortgage growth in the United States. We all hear the reverse mortgage commercials on TV, but do we know exactly what reverse mortgages really are? And more importantly, is a reverse mortgage something that is safe and can help me improve my life?

What is a Reverse Mortgage?

As defined by HUD, U.S. Department of Housing and Urban Development:

“A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.”

Below is a list of some of the qualifying requirements for a reverse mortgage.  

 To qualify you must be 62 years of age or older.

 Title to the home must be in your name.

 You will need to own your home outright or have substantial equity available.

 You are required to live in your home as your primary residence.

 You will be required to complete a counseling session with a HUD-approved counseling agency.

 You must be financially able to pay your property taxes, insurance, home maintenance, and any related HOA fees.

 It’s not only important to know what a reverse mortgage is, but it is also important to know if a reverse mortgage can be beneficial to you in your specific situation. Having the guidance of a reverse mortgage professional with experience in helping Texas homeowners to help you evaluate your actual needs will be invaluable.

Please call Robert Reeves today at 214-883-7366 no-cost no consultation.