A reverse mortgage is a loan from the U.S. Government for 50% to 75% of the value of a home owned by a homeowner aged 62 and older. Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to the homeowner. The funds from a reverse mortgage are tax-free. The loan doesn't have to be repaid in the homeowner's lifetime, however, when the homeowner dies, the money received plus approximately 4% interest is repaid by their estate. The loan is repaid when the homeowner ceases to occupy the home as a principal residence, due to the homeowner (the last remaining spouse, in cases of couples) passing away, selling the home, or permanently moving out.
Arkansas Home Equity Conversion Mortgage - Reverse Mortgage
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FAQ
The money you can receive from a reverse mortgage generally ranges from 40-60% of your home's appraised value.
No. When you take out a reverse mortgage loan, the title to your home remains with you. This webpage has information about HECMs, which are the most common type of reverse mortgage. Most reverse mortgages are Home Equity Conversion Mortgages (HECMs).
Cons of HECM You'll have to pay back the HECM if you sell the home or want to move. Just like with a traditional mortgage. There's a minimum age: The youngest borrower needs to be at least 62-years-old to qualify for a HECM.
It's Not Free. You might not have to make payments with a reverse mortgage, but there are still plenty of expenses associated with one. Interest rates are typically higher than a HELOC. Not only do you have to keep up on your taxes and insurance, but there may be either a set up or closing fee.
A reverse mortgage is a loan that allows homeowners to convert the equity in their homes into cash and defer repayment on the loan. Many older homeowners use this type of financial tool to get funds that they need to pay household bills, medical bills or expenses for long-term care needs.
Generally speaking, you can usually get somewhere between 40% to 60% of your home's appraised value. And the higher your home value is, the more money you can potentially access.
Generally speaking, you can usually get somewhere between 40% to 60% of your home's appraised value. And the higher your home value is, the more money you can potentially access.
