Finding Financial Freedom in Your Golden Years
The golden years of retirement should be about relaxation and enjoying the fruits of one’s labor. However, financial challenges can sometimes cloud this period. If you’re 62 or older and have equity in your home, a reverse mortgage might be the beacon of hope you’ve been looking for. Unlike conventional loans, a reverse mortgage lets homeowners tap into their property’s value without the obligation of monthly payments. Instead, the lender pays you, providing a financial cushion during your retirement.
By flipping the traditional mortgage model, it provides retirees a way to supplement their income by leveraging their home’s value. After an appraisal, a portion of the home’s equity is made available to the homeowner, which can first be used to clear any existing mortgages. The remaining funds can be taken as a lump sum, monthly payments, or a combination of both, depending on the homeowner’s preference.
However, there are some stipulations. Homeowners must continue paying property taxes, insurance, and maintain their home to keep the loan in good standing. Furthermore, the loan amount grows over time due to accumulating interest. But the silver lining is that with a HECM, you’ll never owe more than the home’s value, thanks to its non-recourse nature.
The loan becomes due when the homeowner sells the property, moves out, or passes away. In the latter case, heirs have options to retain the property or sell it to settle the loan.
In a regular mortgage, homeowners make payments to the lender. In a reverse mortgage, the lender makes payments to the homeowner.
Upon selling, the proceeds will first be used to pay off the reverse mortgage. Any remaining amount is retained by the homeowner or their heirs.
It might. While the funds from a reverse mortgage aren’t taxable, they could impact eligibility for need-based government programs.
If you have a HECM, you won’t owe more than your home’s worth, regardless of market fluctuations.
Yes, there are no restrictions on how you can use the funds, though it’s wise to use them for essential needs and retirement goals.
It’s an opportunity to capitalize on a home’s value without the constraints of monthly repayments. But like all financial tools, it’s essential to understand its nuances and ensure it aligns with your retirement vision. If you’re contemplating a reverse mortgage or exploring other financial avenues, connect with your First Veterans Mortgage Loan Officer. They can provide insights tailored to your situation, helping you make an informed decision for a more comfortable retirement.
*All product information represented on this page is subject product guidelines and can change at anytime. It is for educational and informational purposes only and not a commitment to lend. Please contact your Nationwide Mortgage Bankers Loan Officer today get the latest product guidelines and guidance on what loan programs fit your unique financial picture and goals.
We make financing your home simple and seamless with our user-friendly online platform, allowing you to quickly apply and get pre-qualified for a home loan. Our mortgage specialists offer prompt feedback and support, ensuring a smooth and efficient home financing journey.
Nationwide Mortgage Bankers, Inc. (NMB), going by NMB Home Loans, Inc. in the states of AL, AZ, GA, IL, IA, KS, LA, MN, MT, ND, OK, PA, SC, SD, TX, WV and as NMB Home Loans in KY and MA| NMLS# 819382 | (www.nmlsconsumeraccess.org) 3 Huntington Quadrangle, Suite 403N, Melville, NY 11747 | Branch NMLS 1822931 | (833) 700-8884 | www.nmbnow.com. NMB is in no way affiliated with Nationwide Mutual Insurance Company. “NMBNOW” is a registered DBA of Nationwide Mortgage Bankers, Inc. All loans are subject to credit and appraisal approval. Not all applicants may qualify. Some products and services may not be available in all states. NMB is not acting on behalf of or at the direction of FHA/HUD/USDA/VA or the federal government. By refinancing your existing home loan, your total finance charges may be higher over the life of the loan. This is an advertisement. Licensed under the California Finance Lenders Law by The Department of Financial Protection and Innovation #60DBO73939 | Georgia Residential Mortgage Licensee | MA Mortgage Lender License #ML819382 | Licensed by the N.J. Department of Banking and Insurance | Licensed Mortgage Banker – NY Department of Financial Services. | Rhode Island Licensed Lender | Licensed by the Virginia State Corporation Commission. Additional state licensing information can be found at https://nmbnow.com/disclosures-and-licensing/
By refinancing your existing home loan, your total finance charges may be higher over the life of the loan.