By Jacquelyn Brinker, Branch Manager, Union National Mortgage Company

Do you or someone you know have difficulty making ends meet after retirement? An option to consider might be a reverse mortgage.

In a nutshell, a reverse mortgage provides the homeowner with a monthly income paid to them from the equity in their primary residence. The mortgage incurs debt against the home. No payment is due from the homeowner as long as they maintain the home as their primary residence.

To qualify for a reverse mortgage, the homeowner must be at least 62 years of age. There is no credit score requirement. All owners of the property must meet the age requirement and must remain in the property and maintain it as their primary residence.

With a typical mortgage, the homeowner makes monthly payments, and with each payment, equity in the home increases. With a reverse mortgage, the lender makes payments to the homeowner, and the equity in the property decreases.

How much the homeowner will actually receive on a monthly basis is dependent upon their age, the amount of equity they have in the property, and the appraised value.

The main reason a reverse mortgage is chosen is to gain financial independence and maintain an adequate standard of living without leaving their current home. The best way to decide if a reverse mortgage is right for you is to compare it to the other option: selling your house. To do this, ask these three questions:

• How much cash can I get by selling my home?
• How much will it cost to buy or rent a new place?
• Is it worth my moving now, or do I prefer to do something else with the money?

With a reverse mortgage, the money does not “run out.” The program is insured and backed by the US Department of Housing and Urban Development (HUD). A homeowner may elect to receive monthly payments, a line of credit, and even a lump sum payment with future installments. Another attractive feature is that the money may be used at the discretion of the homeowner and is not restricted.

When the homeowner leaves the home, the loan comes due, and at that point, of course, the home would be sold and the mortgage paid off. Similarly, if the homeowner leaves the home with a traditional mortgage, the same scenario would apply. If this leaves you with questions on this concept, we have answers!

Many seniors and baby boomers confirm what they knew all along, where they live now is the best place to be! They also know that “Your Home Loan Matters”!

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