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Reverse Mortgages
What is a reverse mortgage?
A reverse mortgage is a home loan (used for any purpose) where seniors, 62 and older, can access the equity (cash) built up in their home.
There are several different reverse mortgage programs. Fannie Mae Home Keeper®, Jumbo Cash-Out loan, and the HUD-insured Home Equity Conversion Mortgage (HECM) are three such programs. As demand increases, more reverse mortgage programs from different organizations will become available.
It is called a reverse mortgage because you borrow money from a lender, but
the lender makes monthly payments to you, rather than you making monthly payments
to the lender. All interest is paid at the end of the loan, rather than in the
beginning.
What are some of the benefits of a reverse mortgage?
- Strengthen your personal and financial independence.
- Help pay for health care or other needs.
- You can never lose your home in foreclosure as long as you maintain the property tax and insurance payments.
- The loan is only paid off when the house is sold by you or your heirs, or all borrowers move out of the house.
- Keep your Medicare or Social Security benefits.
- Use it as a credit line and draw upon it as needed.
- Get all your cash right away.
- Get the best of both—get cash now and have a balance in reserve to use as a credit line.
- No Income Requirements: The homeowner does not need to be working and is not qualified based on income.
As the homeowner receives monthly cash income, the loan balance increases.
In the following twelve-month example, the homeowner begins with a debt-free home.
As money is received by the homeowner, the mortgage grows. By the end of month
twelve, the homeowner owes the bank $6,000 plus $232.44 interest. All Reverse
Mortgage loans have a variable rate.
Assumptions*
| Regular monthly advances | $500 |
| Annual interest rate | 7.0 % |
| Monthly interest rate | .583% (.07 / 12) |
| Month | Beginning Balance | Interest | Ending Balance | Cash Disbursement |
| 0 | 0 | 0.00 | 0.00 | $500.00 |
| 1 | $500.00 | $2.92 | $502.92 | $500.00 |
| 2 | $1,002.92 | $5.85 | $1,008.77 | $500.00 |
| 3 | $1,508.77 | $8.80 | $1,517.57 | $500.00 |
| 4 | $2,017.57 | $11.77 | $2,029.34 | $500.00 |
| 5 | $2,529.34 | $14.75 | $2,544.09 | $500.00 |
| 6 | $3,044.09 | $17.76 | $3,061.85 | $500.00 |
| 7 | $3,561.85 | $20.78 | $3,582.63 | $500.00 |
| 8 | $4,082.63 | $23.82 | $4,106.44 | $500.00 |
| 9 | $4,606.44 | $26.87 | $4,633.31 | $500.00 |
| 10 | $5,133.31 | $29.94 | $5,163.26 | $500.00 |
| 11 | $5,663.26 | $33.04 | $5,696.29 | $500.00 |
| 12 | $6,196.29 | $36.15 | $6,232.44 | $500.00 |
*Many criteria are considered when determining the reverse mortgage loan amount, interest rate, etc.
 One Stop Loans - 28494 Westinghouse Place, Suite 304 - Valencia, CA 91355 Office Phone: (661) 253-1363 Fax: (661) 554-7056 Toll Free Phone: (800) 472-6190 One Stop Loans is a Mortgage Loan Broker, licensed by the CA Dept. of Real Estate under License #01436401. One Stop Loans does not provide accounting, tax or legal advice, and cannot guarantee the tax-deductibility of any interest or fees paid. We recommend that you consult your CPA, tax accountant, or attorney for proper advice. For questions or comments related to this site please contact our Webmaster: mailto:webmaster@onestoploans.info For Customer Service questions or issues, contact our Customer Care Dept. at support@onestoploans.info Rates and fees are subject to change without notice. 
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