A home can mean many things. A place to rest. Somewhere to make memories and to spend time with loved ones. It can be a foundation for the future. A reminder of what’s important.
At Smartfi Home Loans, LLC, we know how much your home matters. That’s why we do everything we can to make your mortgage experience as pleasant as possible.
From our knowledgeable and responsive team to our tailored loan options and competitive rates – we’re here to help you find the right mortgage for your individual needs.
Smartfi Home Loans, LLC. The thoughtful approach to lending.
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A common problem for many Americans entering retirement age is maintaining a healthy cash flow. Even for those who have built a diverse portfolio and significant home equity, there may be times when tapping into those assets is either not possible or not financially prudent.
And with more people retiring than at any point in history and with life expectancies continuing to rise, it has never been more important to make savings last.
That’s where a reverse mortgage can help.
With a reverse mortgage, you can use the equity in your home to unlock new spending flexibility – giving you peace of mind in knowing you’re prepared for whatever’s next.
Here are a few reasons why more Americans aged 62 or older are considering reverse:
- Protect against home price decline
- Improve and maintain the balance of your portfolio
- Experience greater financial flexibility for necessities like healthcare or education
- Lower your interest payments by paying off your mortgage
With a reverse mortgage, you receive money in the form of payments or a line of credit, secured against the equity you have in your home. As with any other loan, terms and payouts are determined by your fees and interest rate.
Basic requirements for reverse mortgage eligibility include the following:
- All borrowers on the home’s title are aged 62 or older
- You own your home outright or have at least 50% equity in your home
- You live in your home as your primary residence for the life of the reverse mortgage
- You receive pre-loan financial counseling from an approved counselor
If you’re interested in learning more about whether you’re eligible for a reverse mortgage, please don’t hesitate to give us a call or get started by filling out our online form.
With a reverse mortgage, rather than the homeowner making payments to the lender as in a traditional (forward) mortgage, the lender instead makes payments to the homeowner.
The homeowner chooses the type of payments they receive and only accrues interest on those payments. Any interest is then rolled into the balance of the loan, while the homeowner also maintains the title to the home. As payments are made to the homeowner during the life of the loan, the homeowner’s debt increases and home equity decreases.
As a homeowner with a reverse mortgage, your main obligations are the following:
- Paying all property-related expenses in a timely manner, including property taxes, HOA fees and homeowner’s insurance premiums
- Making sure the property’s condition stays well-maintained, keeping it to the same standard as when the reverse mortgage was obtained
- Continuing to live in the property as your primary residence, while proving this on an annual basis
- Ensuring that you do not become delinquent on any federal debts such as student loans or taxes owed to the IRS
The short answer is, no! As long as you continue to fulfil the basic obligations described above, the balance of the loan is simply held against your home equity. A reverse mortgage only becomes due and payable if you move or sell the property, or when the last surviving borrower passes away.
A trusted mortgage service provider can help you work through different options in the event you are unable to meet your obligations. These options may include:
- Repayment plan
- Financial counseling
- Refinancing possibilities
- Selling your home
- Paying off the reverse mortgage
It’s important to remember that not meeting your loan obligations can result in default, meaning your loan servicer can demand the loan be repaid in full and even foreclose and sell the property. But at SmartFi Home Loans, LLC, we’re here to help you make sure that doesn’t happen!
If you move or sell your home, the balance of the reverse mortgage (disbursement plus interest) becomes due and must be paid off.
When the borrower of a reverse mortgage passes away, the loan becomes due and payable. At this point, heirs have a number of options, including repaying the loan, selling the home or taking out an additional mortgage to cover the balance.
Applying for a reverse mortgage is easy with SmartFi Home Loans, LLC! If you’re interested in applying with us, simply give us a call at (858) 243-6080 or get started by filling out our quick online form.