Are you “house rich but cash poor” and thinking about tapping into your home equity? If so, you may find the reverse mortgage resources below very helpful. Getting educated is the key and these reliable resources will help you gain the knowledge you need before making any decisions.
What is a Reverse Mortgage?
HECM: The Home Equity Conversion Mortgage (HECM) is Federal Housing Administration’s (FHA) reverse mortgage program which enables you to withdraw some of the equity in your home. The government has recently revamped the HECM to strenghen the program’s finances and to ensure that those who take out a loan have sufficient monetary reserves to cover their property taxes and homeowners insurance payments. If you’re at least 62 years of age or older, own your property outright or just have a small mortgage balance and also occupy the property as your principal residence you may qualify. HECM is the only reverse mortgage insured by the U.S. Federal Government and is only available through an FHA approved lender.
Consumer Financial Pretection Bureau (CFPB) – Find answers to many consumer questions regarding reverse mortgages. Learn how they work and what you need to qualify. Detailed information about what a reverse mortgage is and how a reverse mortgage works can be downloaded in CFPB’s Considering a Reverse Mortgage Guide.
How does a Reverse Mortgage Work?
Reverse.org provides a good explanation of how a reverse mortgage works as well as examples. Their explanation states that “a reverse mortgage, like a traditional mortgage, is a loan made by a lender to a homeowner using the home as security or collateral. With a traditional mortgage, the homeowner uses their income to pay down the debt over time. However, with a reverse mortgage the loan balance grows over time because the homeowner is not making monthly mortgage payments.” See examples of how a reverse mortgage works on their website.
Federal Trade Commission Consumer Information on Reverse Mortgages – Learn about how reverse mortgages work, types of reverse mortgages, how to qualify for one, how to get the best deal, and how to report any fraud you might see.
Reversemortgage.org – An in-depth guide including a step by step roadmap guiding you through the features of a reverse mortgage and the process of obtaining one.
Reverse Mortgage Facts
8 Reverse Mortgage Myths and Facts for Seniors – NCOA has put together a great resource on the myths and facts of reverse mortgages. While reverse mortgages can be a useful financial tool for older homeowners they’re not for everyone so it pays to get educated and know the myths and facts about reverse mortgages.
Reverse Mortgage Pros and Cons
Reverse.org discusses the pros and cons of reverse mortgages.
Websites and Blogs
ReverseMortgageDaily.com. Reverse Mortgage Daily is the premier independent source for news, commentary, and analysis covering the reverse mortgage industry. RMD began in late 2007 as an industry blog, offering a down-to-earth, personal, and independent perspective on reverse mortgages.
NCOA – National Council on Aging – Helps seniors explore how to use their home equity wisely, and what other community living options may be available.
Booklets and Guides
NCOA’s Use Your Home to Stay at Home© is the official federally approved consumer booklet for older homeowners considering tapping their home equity using a reverse mortgage. The 32-page guide is designed to help older homeowners determine if a reverse mortgage is right for them. It is written specifically for older adults and discusses the challenges of aging in place, how to use your house as a financial resource, and the types of loans available. It also includes tips, Web sites, and information on government programs that can help older adults remain independent. You can download the booklet in English or Spanish or order printed copies in quantities of 100 or more.
Using your House in Retirement: Using Your House reviews the two most common ways to use your house to boost your income in retirement – downsizing and a reverse mortgage – with clear examples, a discussion of the pros and cons of each approach, and links to tools on the web where you can get estimates of what downsizing or a reverse mortgage can do for you. You can download a free PDF booklet or order printed versions for $2.75 each.
Reverse Mortgage Calculators
NRMLA – The reversemortgage.org calculator is provided for illustrative purposes only. It is intended to give users a general idea of approximate costs, fees and available loan proceeds under the FHA Home Equity.