Introduction of Reverse Mortgages

Imagine living in your home mortgage free, or enjoying monthly proceeds for life benefiting from the years you've invested in your home. A reverse mortgage is a unique tool designed for seniors 62 and older. You enjoy access to part of the equity in your home and the freedom and comfort of the home you've known for so many years. It's your home, now you can put it to work for you.

Reverse mortgage borrowers retain ownership and title to their home. It's yours just as it was before, but now you can benefit from the equity that's been building in your home for years. In addition, HECM reverse mortgage loans give you the peace of mind of an FHA backed loan where you will never owe more than the home is worth. You can get a reverse mortgage on your primary residence and no repayment is due until the last borrower passes away or permanently leaves the home.

As a protection all those seeking a reverse mortgage are required to obtain HUD counseling (from an independent third party) prior to incurring any costs associated with the loan. While proceeds from a reverse mortgage are not subject to personal income taxation, borrowers should seek tax advice on how proceeds may affect government needs-based programs such as Medicaid and Medi-Cal.

The Facts

  • A Reverse mortgage is a specialized loan for seniors 62 and older
  • A reverse mortgage allows seniors to access a portion of the equity in their home.
  • Borrowers maintain title and ownership of their home.
  • Proceeds from a reverse mortgage are not subject to personal income taxation, but borrowers should seek tax advice on how proceeds may effect government needs-based programs such as Medicaid and Medi-Cal.
  • It is not a government grant, but a loan that is repaid in the future when the last borrower dies or permanently leaves their residence
  • A reverse mortgage is eligible only for the borrower's primary or principle residence
  • HUD counseling (from an independent third party) is required prior to the borrower incurring any costs associated with the loan
  • * Borrowers should seek professional tax advice regarding reverse mortgage proceeds.
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