Reverse Mortgages
If you are a senior in Phoenix, AZ, looking to get the most out of your retirement, it may be time to consider a reverse mortgage. Jill Waldrop has been helping adults over the age of 62 take advantage of these powerful loans for the last thirty years.
The Seniors-Only Refinance
A reverse mortgage is a way for older Americans to convert some of their home equity to pay off their current mortgage — if they still have one — and create more cash flow to cover everyday expenses, home renovations, medical expenses, and other needs and goals. It’s different from any other kind of mortgage because you don't have to repay what you borrow until you leave the home or do not comply with the loan terms. You are still responsible for maintaining the home and paying all property taxes and homeowners insurance, as you would with a traditional mortgage.
Features
- Must be 62 or older to be eligible (a spouse may be younger)
- Must own and live in home as primary residence
- Must have sufficient home equity (no mortgage or low loan balance)
- Loan repayment not required until you leave your home, as long as you maintain your home, pay property taxes, homeowners insurance, and otherwise comply with loan terms
- Can use to purchase a new home
Proprietary Reverse Mortgage
A proprietary reverse mortgage is a jumbo reverse mortgage that exceeds FHA loan limit guidelines and is intended for owners of higher-value homes. For example, AAG’s Advantage Jumbo Reverse Mortgage offers maximum claim amounts up to $10 million, more than 10 times the FHA lending limit.
Features
- Suited for owners of higher-value homes
- No insurance premiums required
- Not government insured
- Can use to purchase a new home
How a Reverse Mortgage Can Help You
Pay off existing mortgage to increase cash flow.
Paying off your current mortgage is a reverse mortgage requirement.
By removing your monthly mortgage payments, your cash flow increases. You must continue to maintain your property, pay property taxes and homeowners insurance, and otherwise comply with all loan terms.
Renovate home to make it safer and more enjoyable.
The right home improvements can also help maintain or even increase the value of your home.
Give retirement savings accounts more time to grow.
By tapping into home equity and leaving your investment accounts intact, your portfolio could continue to grow.
Delay taking Social Security for larger payouts later.
Social Security benefits increase by a certain percentage each year if you delay your retirement beyond full retirement age. That’s an effective savings plan.
Build a stronger safety net
The best defense against unexpected expenses, such as medical emergencies, sudden market downturns, and other life events, is to ensure you have sufficient financial resources to meet these challenges head on.
Gain greater peace of mind for your long-term healthcare needs.
By creating a reverse mortgage line of credit, which grows over time, you can have money for your care when you need it.
Purchase another home that will better fit your needs.
Instead of using all cash, put down only a portion of the purchase price (from your previous home’s sale or from other savings and assets) and use a HECM to cover the rest, leaving you with no future monthly mortgage payments. You must continue to maintain your home, pay your property taxes and homeowners insurance, and otherwise comply with your loan terms.
Preserve your portfolio in a down market.
Instead of being forced to sell an investment in a down market, you could wait for the market to rebound by using proceeds provided by a reverse mortgage to make up any shortfall. Please do consult your financial advisor, should you have one.
Pay off higher interest debt.
Using a reverse mortgage to pay off higher interest credit cards or other high-interest debt may prove a sound financial move. What a reverse mortgage shouldn’t be used for is an excuse to overspend or avoid addressing what caused the debt in the first place.
Secure your legacy
Consider helping out your children or grandchildren financially while you’re still alive. Help with their down payment on a new home, help with their student loans, and help them build a strong financial foundation for the future.
How does a line of Credit Work?
