What is a Reverse Mortgage?
A reverse mortgage is a financial product primarily designed for homeowners 62 and older with limited income to convert a portion of their home equity into cash while retaining ownership of the property (or purchase a new property).
The loans do not require any repayment until a maturity event occurs. (selling the property or moving out of the home)
There are different types of reverse mortgages but the most common is the FHA Home Equity Conversion Mortgage
Benefits of Reverse vs. Conventional Mortgage
| Reverse Mortgage | Conventional Mortgage |
|---|---|
| Age restriction (62 for most programs) | No age restriction |
| Monthly payments are optional | Monthly payments are required |
| No DTI or FICO score requirements | Minimum DTI and FICO score requirements |
| Typically, the loan balance increases | Typically, the loan balance decrease |
| Property taxes, insurance, & maintenance must be paid | Property taxes, insurance, & maintenance must be paid |
| Non-recourse loan | Risk of foreclosure if payments are not made |
| Borrower owns the home | Borrower owns the home |
Ready to sell? Know your home’s worth, click here.
Homes for sale in Carmel Valley click here.
Shirin Rezania Ramos | 858.345.0685 | www.shirinramos.com | Compass, DRE 0203379
