Can a Reverse Mortgage Improve Your Finances?

Articles & News

Distressed homeowners living alone

Although many retirement dreams include relaxing and enjoying work-free days, the reality for many Americans is that retirement can sometimes be a stressful time.

Between rising health care needs, home maintenance and repairs, or simply limited cash flow due to a fixed income, retirement can actually feel less like relaxing and more like work. A reverse mortgage may be able to help if you’re finding yourself feeling limited by your current situation.

For those who qualify for a reverse mortgage, here are a few ways it may possibly improve your situation:

Freeing up cash flow. If you’re feeling pinched by tight finances in retirement, a reverse mortgage may be a way to simply free up some cash flow. By potentially tapping into your home equity while you still live in your home as a primary residence, a HECM (Home Equity Conversion Mortgage) allows you to access your loan proceeds as a lump sum, in monthly or ongoing installments, or as a line of credit you can access.*

Providing funds for home maintenance. For many older homeowners, home maintenance is daunting. The idea of shoveling snow, mowing a large lawn, dealing with exterior and interior fixes and other home improvements can be stressful. A reverse mortgage can potentially free up funds for these needs so you can enjoy your home with greater peace of mind.

Helping with age-friendly home improvements.With a reverse mortgage, you may be able to extend your ability to live in your home with a few simple home improvements, such as ramps for ground level access, or grab bars for stairs and bathrooms. A reverse mortgage can potentially provide funds you can access to help with these home improvements that make your home more livable as you age.

If you are feeling stressed by your retirement situation, consider the ways a reverse mortgage may be able to help you.

*Contact a reverse mortgage professional to learn about the borrower requirements to obtain a reverse mortgage and qualifications the home must meet to qualify for a reverse mortgage.

This article is intended for general informational and educational purposes only, and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.

Finance of America Reverse

These materials are not from HUD or FHA and were not approved by HUD or a government agency.

©2021 Finance of America Reverse LLC is licensed nationwide | Equal Housing Opportunity | NMLS ID # 2285 (www.nmlsconsumeraccess.org) | 8023 East 63rd Place, Suite 700 | Tulsa, OK 74133 | AZ Mortgage Banker License #0921300 | Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act | Georgia Residential Mortgage Licensee #23647 | Kansas Licensed Mortgage Company | Massachusetts Lender/Broker License MC2285: Finance of America Reverse LLC | Licensed by the N.J. Department of Banking and Insurance | Licensed Mortgage Banker -- NYS Banking Department where Finance of America Reverse is known as FAReverse LLC in lieu of true name Finance of America Reverse LLC | Rhode Island Licensed Lender | Not all products and options are available in all states | Terms subject to change without notice | For licensing information go to: www.nmlsconsumeraccess.org When the loan is due and payable, some or all of the equity in the property that is the subject of the reverse mortgage no longer belongs to borrowers, who may need to sell the home or otherwise repay the loan with interest from other proceeds. The lender may charge an origination fee, mortgage insurance premium, closing costs and servicing fees (added to the balance of the loan). The balance of the loan grows over time and the lender charges interest on the balance. Borrowers are responsible for paying property taxes, homeowner’s insurance, maintenance, and related taxes (which may be substantial). We do not establish an escrow account for disbursements of these payments. A set-aside account can be set up to pay taxes and insurance and may be required in some cases. Borrowers must occupy home as their primary residence and pay for ongoing maintenance; otherwise the loan becomes due and payable. The loan also becomes due and payable (and the property may be subject to a tax lien, other encumbrance, or foreclosure) when the last borrower, or eligible non-borrowing surviving spouse, dies, sells the home, permanently moves out, defaults on taxes, insurance payments, or maintenance, or does not otherwise comply with the loan terms. Interest is not tax-deductible until the loan is partially or fully repaid.