A reverse mortgage is different than other Utah mortgages, with a traditional mortgage you make monthly mortgage payments, but with a reverse mortgage, the mortgage lender pays you money through monthly installments and/or a one-time lump sum payment. The amount of money you receive is dependent on your age and the value of your home.
One of the great advantages of a reverse mortgage is that you are not required to pay the loan back until the home is no longer your primary residence. Another great feature of a reverse mortgage is you can never owe more than the value of your home, no matter what.
Eventually the money paid to the homeowner is repaid with interest, however, it generally doesn’t become due until the homeowner leaves the home due to death, move, etc.
Getting a reverse mortgage is a big step that needs to be carefully evaluated. However, there are many advantages to a reverse mortgage.
No monthly mortgage payments*
Non-recourse loan - you’ll never owe more than the home is worth
Leverage crucial retirement income
Strategically plan for social security income
No limitations on how the funds are used
No prepayment penalty
Can be used with a current primary residence or the purchase of a new home
Typically those who benefit the most from a reverse mortgage are those who plan to stay in their homes over an extended period and have built a decent amount of equity in their homes.
If are over 62 years of age you are eligible for a reverse mortgage. There are additional conditions to be able to qualify.
Own the property outright or have considerable equity
Occupy the property as your principal residence
Not be delinquent on any federal debt
Participate in a consumer information session from a HUD-approved counselor
Non-borrowing spouses under 62 years of age are now protected from being forced from the home
All FHA HECMs are insured through the Federal Housing Administration (FHA)
Borrowers have no limit as to how long they can stay in the home*
When the loan becomes due, the estate can buy your home at 95% of the current value, regardless of what is owed
Education – financial counseling is required
We can help you figure out if you’re eligible for a reverse mortgage. Call us, your Utah mortgage broker, 801-272-0600.