A&A Funding has offered Reverse Mortgages for years; and those programs werent new when we started many years ago, but as more of A&A Funding's clientele face the challenges of building a secure retirement, there’s never been a greater need to find ways to unlock the power of that equity. That’s why we believe it’s time to take a closer look at reverse mortgages. As a uniquely powerful tool to leverage the accumulated value you’ve worked so hard for, a reverse mortgage can increase your financial flexibility and—most important—protect the ownership of your home.
What exactly is a “reverse mortgage”?
Insured by the Federal Housing Administration (FHA), the Home Equity Conversion Mortgage (HECM)—also known as a “reverse mortgage”—allows homeowners age 62 or older to access a portion of their home’s equity in the form of a loan. The funds accessed are tax free,* DO NOT require monthly mortgage payments—and allow the borrower to retain ownership and title to their home—so long as they:
- Live in the home as their primary residence.
- Continue to pay required property taxes and homeowners insurance.
- Maintain the home according to Federal Housing Administration
What are the benefits and uses of a reverse mortgage?
From eliminating your monthly mortgage payment to paying for unexpected
expenses, a reverse mortgage can help provide financial flexibility and relieve
many of the financial pressures you face in retirement. A HECM can allow you to:
- Pay off an existing mortgage, monthly bills or healthcare expenses
to increase cash flow.
- Make needed home repairs or modifications to live more comfortably.
- Replace taxable withdrawals from 401(k) or other retirement plans with
tax-free reverse mortgage proceeds.
- Establish a line of credit for emergencies or occasional expenses.
- Help a child or grandchild with major expenses, like a down payment
on a home or college tuition.
“Using a reverse mortgage to tap
home equity is one of the most powerful
options available to retirees today.”
Director, Center for Retirement Research
How can you receive the funds?
Depending on the specific product you choose, there is a range of options for
receiving the proceeds of a reverse mortgage, including:
- A lump sum payment
- A monthly income stream
- A line of credit
- Any combination of the above
What amount can you receive from a reverse mortgage?
The amount of money that you can receive from a HECM depends on a number of factors, such as your age, the type of product you select, current interest rates
and the appraised value of your home.
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