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Reverse Mortgages

Reverse Mortgages are a popular choice for homeowners who’ve built equity in their respective home. Marketed as a financial tool, Reverse Mortgages are designed by the federal government as a form of financial relief for homeowners 62 and older. It allows seniors to stay in their home, eliminate their current mortgage payment, and access their equity – tax-free! Unlike traditional “forward” home loans or second mortgages, no repayment is required until the homeowner(s) no longer occupies the property as their primary residence. Efinity Mortgage believes this program may carry excessive costs compared to alternatives and as such, strongly recommends to speak with one of our Licensed Financial Professionals to learn more.

Who can get a reverse mortgage?

Any homeowner over the age of 62 can apply for a reverse mortgage. As the borrower, you must occupy the home as your primary residence. Reverse mortgages are based on your home’s equity – there are no income or credit requirements.

How do reverse mortgages work?

The application process is the same as any other loan. Your current loan (if you have one) will be paid off with your new reverse mortgage in essence eliminating any current mortgage payment you have. If you have additional equity, you can access that money, a benefit being tax-free. If your home is paid off, you can use a reverse mortgage to gain access to the equity that you have worked so hard to build. As the homeowner(s), you can choose from one of four ways to receive the additional income from your reverse mortgage:

1. As a line of credit
2. As a monthly payment
3. In one lump sum amount
4. Any combination of the above options.

Since reverse mortgages allow you to make no monthly payments, the mortgage amount you owe grows larger over time. As your mortgage increases, the amount of equity you have left after selling or paying off the loan generally grows smaller. The amount owed at the conclusion of a reverse mortgage (when you no longer occupy the home) is either the amount of the home’s value or the amount of the current mortgage—whichever amount is less. Also, your home will continue to appreciate just the same as if you had a regular mortgage, increasing your equity as time progresses.

As a Reverse Mortgage borrower, you will retain your place on the property’s title and continue to own your home, so you will still be responsible for property taxes, insurance and repairs. No repayment is required until you no longer occupy the house.

As mentioned above, Efinity Mortgage believes this program may carry excessive costs compared to alternatives and as such, strongly recommends to speak with one of our Licensed Financial Professionals to learn more.

Contact us for more information on Reverse Mortgages.