A reverse mortgage is a way to turn the equity in your home into cash which is usually tax free* without having to make monthly mortgage payments. Instead of monthly payments, the loan is taken against a senior’s home equity and repaid in one lump sum when the last borrower leaves the home. As part of the loan, the borrower is required to continue paying property taxes, insurance and maintenance (and HOA fees, if applicable). These loans can potentially help seniors gain financial independence from increasing living expenses.
*This information does not constitute tax advice. Please consult a tax advisor regarding your specific situation.
Private loans backed by the companies that develop them.
Federally-insured reverse mortgages backed by the U. S. Department of Housing and Urban Development (HUD). HECM loans enable you to withdraw a portion of your home’s equity and can be used for any purpose. How much you can borrow with a HECM or proprietary reverse mortgage depends on several factors, including:
An H4P (a type of HECM backed by the FHA) enables senior homebuyers to purchase a new primary residence that better suits their needs and obtain a reverse mortgage in one transaction. You can use an H4P if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing. This type of HECM reverse mortgage, if it is offered in your area, may allow you to:
To learn more about reverse mortgages, please contact your local Fairway reverse mortgage planner.
Copyright©2017 Fairway Independent Mortgage Corporation (“Fairway”) NMLS#2289. 4801 S. Biltmore Lane, Madison, WI 53718, 1-877-699-0353. All rights reserved. Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency. Reverse mortgage borrowers are required to obtain an eligibility certificate by receiving counseling sessions with a HUD-approved agency. Youngest borrower must be at least 62 years old. Your monthly reverse mortgage advances may affect your eligibility for some other programs. At the conclusion of the term of the reverse mortgage loan contract, some or all of the equity in the property that is the subject of the reverse mortgage no longer belongs to you and you may need to sell or transfer the property to repay the proceeds of the reverse mortgage with interest from your assets. We will charge an origination fee, a mortgage insurance premium, closing costs or servicing fees for the reverse mortgage, all or any of which we will add to the balance of the reverse mortgage loan. The balance of the reverse mortgage loan grows over time and interest will be charged on the outstanding loan balance. You retain title to the property that is the subject of the reverse mortgage until you sell or transfer the property and you are therefore responsible for paying property taxes, insurance, and maintenance. Failing to pay these amounts may cause the reverse mortgage loan to become due immediately. Interest on reverse mortgage is not deductible to your income tax return until you repay all or part of the reverse mortgage loan. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply.