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San Antonio Reverse Mortgages

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What are Reverse Mortgages

Reverse mortgage enables older homeowners (62+) to convert part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. The reverse mortgage is aptly named because the payment stream is “reversed". Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to you.

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How Much Money Can I Get?

There are a number of factors that determine which include:

  • Your age (or the youngest spouse if you’re a couple)
  • Appraised Value of the home
  • Interest Rates

Do I Need to Get Counseling?

Yes, counseling is one of the most important consumer protections built into the program. It requires an independent third-party to make sure you understand the program, and review alternative options, before you apply for a reverse mortgage.

HUD-approved counseling agency, or a national counseling agency, such as AARP (800-209-8085), National Foundation for Credit Counseling (NFCC - 866-698-6322), and Money Management International (877-908-2227). Counseling is required for all reverse mortgages and may be conducted face-to-face or by telephone.

How you can use the Money you Receive?

Here is the most important reverse mortgage information you need to know: the money you get from a reverse mortgage is actually money you already had, money that was in a sense sitting unused in your home in the form of home equity. If you think of it that way, it's easy to understand why you can use the money you get for almost anything.

Eligible Properties:

  • Single-Family homes
  • 2 to 4 unit properties
  • Manufactured home (built after June 1976
  • Condominiums
  • Townhouses

Payment Options for Reverse Mortgages:

  • Lump sum - one lump of cash out.
  • Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
  • Term - equal monthly payments for a fixed period of months selected.
  • Line of Credit - unscheduled payments or in installments, at times and in amounts of borrower's choosing until the line of credit is exhausted.
  • Modified Tenure - combination of line of credit with monthly payments for as long as the borrower remains in the home.
  • Modified Term - combination of line of credit with monthly payments for a fixed period of months selected by the borrower.
  • Fixed monthly payments (either for a set term or for as long as you live in the home)

Here are some of the most popular uses for reverse mortgages:

Pay off existing debts.

Anything from credit cards to home equity lines of credit to car loans. Please review all loan agreements.

Note: Consolidating debt may result in higher overall interest cost over the life of the loan. Consult your financial advisor on paying short term debt with your mortgage loan.

Creating a cash reserve for emergencies.

Many people like the feeling of security they get from having a financial "cushion".

Paying for home maintenance or repair.

Your home is probably your most valuable asset and you can use the reverse mortgage money to maintain, or possibly increase its value.

Paying off an existing mortgage.

With a reverse mortgage, you will pay off your first mortgage (if applicable) and completely eliminate the need to make required monthly mortgage payments, giving you more disposable income each month.

Providing funds for long-term care insurance or other financial tools.

Freeing up cash with a reverse mortgage may help you afford components of a financial plan.

Being able to afford special things you've always wanted to do.

Such as travel or hobbies. Don't let lack of money keep you from doing the things you've always dreamed of doing. A reverse mortgage makes them possible.

Adding to your monthly income.

You can take the money from a reverse mortgage as a monthly payment to supplement your existing income, or you may choose a line of credit or a lump sum.

Helping family members or loved ones financially.

Pay for tuition or establish an education fund for grand kids, help a child buy a new house or just use your reverse mortgage to give gifts to the people you care about. The choice is yours.

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