Retirement News with Professor Craig

Retirement News with Professor Craig

The Retirement News blog is dedicated to the financial and physical health and well-being of older Americans. 
Whether you're already in or nearing retirement, you will find important, topical information in the blog to help you make informed decisions on your road to retiring more freely.
As a 25-year veteran in the financial services industry and a certified trainer and teacher, Professor Craig's #1 goal is to help you thrive in retirement with financial peace of mind. 

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Breaking Down the Reverse Mortgage: Are You Sitting on the Secret to Retirement Success?
Retirement News, Financing Retirement, Reverse Mortgage Facts

Breaking Down the Reverse Mortgage: Are You Sitting on the Secret to Retirement Success?

“In proportion as he simplifies his life, the laws of the universe will appear less complex, and solitude will not be solitude, nor poverty poverty, nor weakness weakness.” - Henry David Thoreau

On July 12th, we observe National Simplicity Day, honoring the life and philosophies of poet Henry David Thoreau who advocated for a simpler way of life. What a great time to step back and focus on eliminating unnecessary burdens and complexity in our increasingly busy lives!

For retirees or those approaching retirement, you may be thinking about how to make the most of the years ahead without financial stress weighing you down. A reverse mortgage loan can be a valuable tool for financial peace of mind.

You’ve likely heard about this type of loan. But how much do you really know, especially when it comes to separating fact from fiction?

Setting the record straight

If you’re an older homeowner or homebuyer, a reverse mortgage loan can help you enjoy greater financial flexibility and security for the years ahead. Here’s an overview of what it is — and what it isn’t — so you and your loved ones have the information you need to make an informed financial decision.

Reverse mortgages are designed specifically to help older homeowners and buyers. Due to inflation, market fluctuations and the rising cost of living, many retirees are concerned about outliving their retirement savings. But with a reverse mortgage, you can leverage home equity as monthly payments, a lump sum or a line of credit that’s available if and when you need it.*

The bank doesn’t own your home. With a reverse mortgage, you will continue to live in and own your home and retain the title. To remain in good standing, you must continue to meet your loan obligations, including keeping current with property taxes, insurance, and maintenance

It involves a meticulous process. Rest assured, reverse mortgage loans are not entered into lightly. Lenders are required to perform a thorough financial assessment on each application, ensuring borrowers have the means to meet the ongoing loan obligations. And as part of the loan process, you also must meet with an independent, FHA-approved counselor to objectively ensure that you understand the reverse mortgage process, what it entails and the individual terms of your loan.

Just like any other mortgage loan, there are associated fees. FHA-insured mortgage loans (both traditional and reverse) require an upfront Mortgage Insurance Premium to ensure that you never owe more than your home is worth if the balance of the loan exceeds your home’s value.

Other reverse mortgage fees include:

  • The cost of reverse mortgage counseling by an independent, third-party counselor
  • Interest that accrues during the life of the loan, due when the loan is repaid
  • A monthly service fee that some lenders may charge

Keep in mind, all upfront costs can be financed by the loan, which minimizes out-of-pocket expenses.

You won’t owe more than the home’s value when the loan is repaid. A reverse mortgage is a non-recourse loan. That means that a borrower, as well as his or her estate, won’t owe the lender more than the home’s value when the loan is repaid.

It won’t interfere with your Social Security. While regular Social Security or Medicare are generally not affected, needs-based benefits, such as Supplemental Security Income or Medicaid, may be impacted. Consult with a financial professional or government benefits specialist about your individual situation. Visit www.ssa.gov

Your spouse is generally protected under the loan, even after you pass away. A co-borrowing spouse is entitled to remain in the home as their primary residence, enjoying all the benefits of the reverse mortgage, as long as they continue to meet the loan obligations.

A non-borrowing spouse on a HECM loan may also continue to reside in the home as their principal residence, as long as they meet certain eligibility requirements and keep up the terms of the loan. They don’t need to take title or legal right of the property to ensure this protection.

Remember, if you’re considering a reverse mortgage loan, it’s important to involve your family and trusted advisors in the decision-making process.

Explore your options for simplifying retirement

Dispelling the myths about reverse mortgages can help you and your loved ones make educated decisions about your financial future. To learn more, call Reverse Mortgage Funding (RMF) today at (888) 277-1567 to set up a meeting at your convenience with a licensed reverse mortgage specialist in your area.

This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans retire more freely, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; a 4.7-star / Excellent score on Trustpilot; 4.8 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call 888-277-1567 to speak with a licensed reverse mortgage specialist to learn about our retirement financing products and solutions.

*Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable rate mortgages. In certain states, RMF’s Equity Elite loan provides a fixed-rate term payment option.

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A More Flexible Home Equity Loan

If you’re 62 or older, there is a home equity line of credit option that offers greater financial flexibility than a traditional Home Equity Line of Credit (HELOC). It’s called a Home Equity Conversion Mortgage (HECM) line of credit. 
If you have an existing mortgage or home equity loan you could refinance them with a HECM line of credit and get enhanced benefits, including a flexible payment feature and a line of credit that GROWS when left untouched.
As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance, and keeping your home in good condition.


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