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Is a Reverse Mortgage

Loan Right for You?

Retirement is often referred to as “the golden years” for a good
reason: For many, it’s the best season of life.

If you’re 62 or older and own your home, a reverse mortgage
loan could be just the resource you need to give your retirement

portfolio a boost so you can enjoy the years ahead.

Our simple guide below will help you consider the factors to determine

whether a reverse mortgage loan is the right option for you.

L O AN AD V AN TA GES THINGS T O CONSIDER

You can live in your home as long as you wish and You must have enough equity in your home.
retain the title, as long as you comply with the loan As part of the requirements of a reverse mortgage
terms. loan, the borrower must pay off the existing mortgage,
As with all other mortgage loans, a lien is placed on if there is one. Because a lien is placed on the home,
the home. One common misconception about reverse the home must have enough equity to cover the lien
mortgage loans is that borrowers are selling their amount. Additionally, the U.S. Department of Housing
homes to their lenders. This is simply not true; the and Urban Development (HUD) requires a particular loan
borrower continues to own the home and retain the to value (LTV) ratio.
title. The primary purpose of a reverse mortgage is to
help seniors stay in their homes. Generally, as long as
you continue to pay your property taxes, homeowner’s You must keep the home insured and maintained,
insurance, and home maintenance costs, you will not be as well as pay property taxes in order to avoid
at risk of losing your home. foreclosure.
Because loan repayment is usually covered by the sale
of the home at the end of the loan term, the home must
No monthly mortgage payments are required on the be kept in good condition. In addition,
loan.* you must keep up with the regular
Whereas most mortgage loans require some form homeowner responsibility of
of monthly repayment, a reverse mortgage requires paying property taxes and
no repayment until you move out of or sell the home, insurance to prevent your
pass away, or default on loan terms. This is beneficial loan from becoming due.
because the amount that would have been spent on Your reverse mortgage
housing can be diverted toward other expenses, saved, professional may be
or invested. However, if you so choose, you can make able to arrange to set
payments with no pre-payment penalty. Your only aside some of your loan
financial responsibility is to pay for property taxes, proceeds to pay for
homeowner’s insurance, and home maintenance costs, these expenses.
leaving extra money in your pocket each month.
*Borrower must continue to pay property taxes, homeowner’s Tom Selleck
insurance, and home maintenance costs.
American Advisors Group Paid Spokesperson
“Bringing Stability to Your Retirement”
FLIP