What is a reverse mortgage?

Its official name is a Home Equity Conversion Mortgage (HECM), a loan insured by the Federal Housing Administration (FHA) for homeowners age 62+.

A Reverse Mortgage allows you to:
• Access a portion of your home equity
• Use the income tax-free2 cash proceeds
as you wish
• Eliminate monthly mortgage payments You retain ownership of your home — all you have to do is continue to pay property taxes, homeowners insurance, and for home maintenance as you do now.

How can you use a Reverse Mortgage?

The proceeds of a Reverse Mortgage are used to pay off the existing mortgage. You get the rest as a lump sum, monthly payment, line of credit, or any combination
of these. You can use a Reverse Mortgage in any way they choose, such as:
• Pay bills and everyday expenses
• Help cover the cost of healthcare or home care
• Make home repairs and upgrades to help Age
In Place
• Open a line of credit for unexpected expenses
• Help out family members

– If you are 62 or older
– If you don’t want to make required monthly mortgage payments
– If you are planning on living in the home for at least several years
– If you are interested in a flexible line of credit that is available when you need it

Before you consider a HELOC…

there may be a better choice, exclusively for you.
A Reverse Mortgage.

No Monthly Repayments
The reverse mortgage requires no monthly mortgage payments, and you have the option to prepay at any time without a penalty. By contrast, a HELOC must pay back any money borrowed, plus interest, within the repayment period—requiring monthly payments that can grow over time. Some HELOCs even have prepayment penalties. With the Reverse Mortgage, the loan plus interest is paid back only when you stop living
in the home, sell, or do not meet terms of the loan.

No Annual Fee
The reverse mortgage requires no annual fee to maintain the line and no termination fee. With a HELOC there can be an annual fee and a termination fee that can be hundreds of dollars over the life of the loan.

A Line of Credit That Grows
The unused portion of the Reverse Mortgage credit line grows over time, will stay open and available when needed and cannot be canceled or reduced, as long as you meet the terms of the loan.

With a reverse mortgage you have the option to receive the proceeds from the Reverse Mortgage as a line of credit, regular monthly payments, a lump sum, or any combination of these choices.

FHA Insurance
HECM reverse mortgages require a mortgage insurance premium (MIP) to be insured by the Federal Housing Administration (FHA). Because of this insurance, these loans are “non-recourse,” which means when your home is sold to repay the loan, neither you nor your heirs will be required to repay more than the sale price of the home, no matter how long you live in the home.

Retire on Your Terms with a Reverse Mortgage.

Learn more here