A recent client of ours needed a reverse mortgage, which caused us to learn a lot of things about them we didn’t know before. We want to share some of what we learned today, and talk about how reverse mortgages can be beneficial in a transaction.
A reverse mortgage is actually an FHA loan, complete with stock gaps and limits on the loan balance based on the appraisal, so it’s pretty hard to spend too much money on a reverse mortgage so that there is no equity left in the house at the time when the mortgage is ready to be paid off.
It’s a regular mortgage in the sense that the homeowner actually owns the property and the bank doesn’t. It allows the homeowner the freedom to not make mortgage payments for any amount of time while they have the reverse mortgage in place.
This can be a good tool for some of our seniors, to allow them to stay in their house longer. If the owner of the mortgage passes before the mortgage is paid off, the heirs to that property actually have a full year after the homeowner’s passing to prepare it for the market or keep it in the family through a refinance.
If a reverse mortgage might be a help for you or somebody you know, give us a call or send us an email. We would love to get you in touch with our lender who has been helping us out recently with these reverse mortgages. We look forward to hearing from you!