Reverse Mortgages, What Are Those In Real Estate?

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You see the term “reverse mortgage” a lot in the media streams.

And have been urged to get one as reverse mortgages sound like the next best things next to sliced bread. But what are they and who needs a reverse mortgage? Can you see anyone in the crowd, are you one who does?parade in maine photo

You spend much of your life paying off a mortgage and to be debt free.

And to go in a direcition that sounds backwards, to take on debt once you are free and clear sounds like a bad idea. As you get older but clarification on what exactly is a reverse mortgage.

So how do reverse mortgages work? The money you get usually is tax-free. And here is what else the Federal Trade Commission says about reverse mortgages.

How many kinds or types are there for reverse mortgages? Three exist.

The single purpose reverse mortgages – offered by some state and local government agencies, as well as non-profits. Then there are  proprietary reverse mortgages that are private loans. It all gets rounded out when discussing reverse mortgages when talking federally backed, guarantted reverse mortgages. Called Home Equity Conversion Mortgages (HECMs).

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Rather than an lending institution, third party giving you the skinny on what reverse mortgages are, let’s add more from other voices on the subject.

To keep it just the facts only. To help make the best, informed decision without arm twisting. When it involves your precious nest.

Sometimes an independent salesperson is not your best go to for reverse mortgage information. Your non profit, government institutions can advise better often times. One hand of why to avoid RM. Here are five reasons not to enter into a reverse mortgage.

Here is what HUD’s reverse mortgage program is all about, added to some more fact finding. To chew over, discuss and sleep on if you are wondering are you a candidate for a reverse mortgage.

Accessing your equity discussed in this Wikipedia article on reverse mortgages. In Canada, the borrower must seek independent legal advice before being approved for a reverse mortgage.

Over a lifetime, I have read that the US Census numbers prove the average Joe and Jane move a total of 11.7 times in their life.

Working your way up the rental and house cost food chain is part of it. Growing families and need for more or less space when the nest is empty. Work together with retirement plans that involve housing. Getting married, relocating for a job all add to the pack up and move out. garden maine photo

An HECM lets a home owner age 62 or greater access their equity funds.

What is the downside of a reverse mortgage? The value of an estate inheritance may go down over times as proceeds dwindle.

With reverse mortgages, living in the home is a must.

Using it as a primary residence. You still have the property taxes, dwelling insurance to keep current and in force. Also need to do some Mr Green Jeans property work tinkering. The updates, renovations so the house is in compliance with Federal Housing Administration requirements.

A reverse mortgage can affect Medicaid benefits. And home work is needed because reverse mortgages are not all cut, dried, simple to many people. That have the financing method discussed but not tryly understood.

What are the benefits of a reverse mortgage?

Staying in the home without making mortgage payments. The interest rate can be lower than other financing methods. Heirs to the property, those who inherit can get the remaining home equity after paying off the reverse mortgage loan. clock houlton nmaine photo

The minimum age for a reverse mortgage is 62.

So discussion on the topic is so necessary.

The time to make mistakes is when you are young enough to recover from them.

Later in life is not the season to be rolling the dice and taking chances. That a person might never recover from financially. Look into reverse mortgages, are they right for you at this stage of your life?

Remembering what they actually are.

A reverse mortgage is defined as a recorded legal financial agreement in which a homeowner gives up equity in their home to achieve, in exchange, regular payments. The purpose typically to supplement retirement income.houlton maine photo

In those fixed income, not always predicatable golden years in the making ends meet without a regular job weekly paycheck. But whatever rolls into the direct deposit or mail box once a month for income to keep the wolf from your door.

Unlike traditional house property mortgages, which decline as you pay down the home loan, reverse mortgages rise over time as interest on the loan accrues.

I’m Maine REALTOR Andrew Mooers, ME Broker

207.532.6573 | |

MOOERS REALTY 69 North Street Houlton Maine 04730


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