Reverse mortgage loans are a popular financing option for seniors in Twin Falls, Idaho that allow homeowners to tap into their home’s equity.
How Does a Reverse Mortgage Work?
A reverse mortgage loan allows homeowners who are 62 or older to access a portion of their home’s equity without having to sell their home, give up the title or make monthly mortgage payments. Instead, the borrower must pay property charges, like taxes, insurance and home maintenance. The loan is paid back when the borrower no longer occupies the home.
The amount that can be borrowed depends on several factors, including the borrower’s age, home value, interest rates and the type of reverse mortgage loan.
Borrowers have several options for receiving the funds, including a lump sum, monthly payments, a line of credit or a combination.
Our Reverse Mortgage Loans in Twin Falls, Idaho
Home Equity Conversion Mortgage (HECM)
HECMs are the most common type of reverse mortgage and are insured by the Federal Housing Administration (FHA). This provides a host of consumer protections, including a non-recourse feature that guarantees the sale of the home will cover the balance of the reverse mortgage loan, regardless of the home’s market value at the time of sale.
HECM for Purchase (H4P)
An H4P is a type of reverse mortgage specifically designed for seniors who want to purchase a new home. This can be a useful option for seniors who want to downsize, move closer to family or relocate to a more accessible home.
It can greatly increase homebuying power and enable many borrowers to move to a more expensive area than their current residence. Like a traditional HECM, the borrower does not have to make monthly mortgage payments. Instead, they only need to take care of property charges like taxes, insurance and upkeep.
Jumbo Reverse Mortgage Loan
This type of reverse mortgage is for high-value homes that exceed the loan limit of $1,089,300 set by the FHA for HECMs. The amount of cash available is based on the appraised value of the home, and borrowers typically have more flexibility in payment options.
Reverse Mortgage Loan Benefits
Access To Cash
A reverse mortgage loan allows borrowers to access a portion of their home equity in the form of cash, which can be used to cover living expenses, make their homes more accessible, pay off debt or any other purposes that the borrower chooses.
No Monthly Mortgage Payments
With a reverse mortgage loan, borrowers are not required to make monthly mortgage payments. Instead, they must pay property charges, like insurance and taxes, and maintain upkeep. The loan is a non-recourse loan, meaning neither the borrowers nor the heirs will owe more than the home is worth when it’s sold, even if the real estate market is lower than when the reverse mortgage loan originated.
Long-term Care
Many people use their reverse mortgage loan proceeds for healthcare-related costs. For example, if a homeowner needs to hire an in-home caregiver or pay for other long-term care services. This can be particularly helpful for seniors who want to age in place in their homes.
Portfolio Hedging
Reverse mortgage loans can be used as a buffer asset to protect investments in down markets. Instead of selling off investments at a loss, a borrower could use their loan proceeds to cover expenses until the markets recover.*
Realize Home Equity Gains
Home equity hit all-time highs in recent years, but without a reverse mortgage loan, most homeowners cannot benefit from equity increases without selling their homes. A reverse mortgage offers the ability to benefit from home equity appreciation while owning and living in the home.
Financial Flexibility
Borrowers have flexibility in how they receive their funds. A line of credit with guaranteed growth is a popular option (applies to unused funds), but borrowers can also choose a lump sum payment, monthly payments or a combination of these options.
Own and Live in the Home
Reverse mortgage borrowers retain complete ownership and can continue to live in their homes as long as they comply with the loan terms, which include using the home as a primary residence.
Government-insured
HECM reverse mortgage loans are insured by the Federal Housing Administration (FHA), which offers additional consumer protections, making it one of the safest loans available today.
Interested in a Reverse Mortgage in Twin Falls, Idaho?
Fill out the form and one of our reverse mortgage specialists will be in touch!
*This advertisement does not constitute tax or financial advice. Please consult a tax and/or financial advisor regarding your specific situation.