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It is a tax-free home loan based on the equity in your home. It works in reverse where the lender makes payments directly to you.
You must be 62 years or older and occupy your home as a primary residence. There is no income or credit requirement to qualify. Any existing mortgage must either be paid in full, or proceeds from the new reverse mortgage must pay off any existing balance.
The loan amount is based on the value of your home and the age of the youngest borrower, who must be at least 62 years old.
Either as monthly payments, a lump sum, a line of credit to draw from at any time, or a combination of any of these.
Any way you choose, for instance:
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Hospital & health care costs, in-home nursing care |
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Home repair and improvements |
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Pay off principal mortgage |
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Help children with expenses or with grandchildren's education |
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Pay off taxes or credit card debt |
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Travel |
Absolutely. You retain full ownership. The lender does not take control of the title.
As with most mortgages there is an origination fee, closing costs and a monthly servicing fee. These fees plus a mortgage insurance premium are financed from the proceeds of the loan.
No, but you may choose to make payments if you like or pay off the loan completely without penalty.
Repayment of the loan and interest does not have to be paid until the home is sold or the owner permanently moves out or passes away.
It is one of the safest mortgages available. Title to the property remains with the homeowners or their trust. A reverse mortgage is non-recourse; the lender can only receive repayment from the proceeds of the sale of your home. You will never owe more than your house is worth.
Proceeds from the loan are tax-free. (Although it is recommended you consult your tax advisor.)
You can use a reverse mortgage as an estate-planning tool or for gifting to family or charitable organizations.
Terry Aman
415-884-3025
terryaman@bankofmarin.com
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