Eligibility Requirements

There are no income, employment, or credit requirements!

• All homeowners must be at least 62 years of age and occupy the property as their primary residence.

• The home can have an outstanding mortgage (it will be paid off).

• Houses, town homes, condominium units, and some mobile homes and PUD’s are eligible.

• The home must meet minimum HUD property standards.  If not, sometimes repairs can be made after the closing of the reverse mortgage.

How much can be borrowed?

The more your home is worth and the older you are, the more you’ll be able to borrow.  The current maximum loan limit is $625,500.  This limit was just increased as part of the latest government stimulas package.  This increase in in effect through June of 2010, after that (as long as it is not extended) it will drop back to $417,000.

Limits are based on:

• Age of the youngest homeowner

• Appraised value of the home

• County in which the property is located

• Current 1-year US Treasure bond rate  

Cash Disbursement Options

You can choose to receive any combination of these options:

• Lump Sum

  • Cash is available immediately

• Term

  • Equal monthly payments for a fixed number of months

• Line of Credit

  • A credit line that you can draw upon whenever you wish.

   

Interest Rate

Interest rates are low and are generally comparable to traditional mortgage rates.  Rates are set based on the one-year US Treasure Bond Rate.  You can choose to have the rate adjusted monthly or annually.  Changes to your rate will have no effect on how much cash is available to you; instead fluctuations in rates cause the loan balance to grow at a slower or faster rate.

Loan Repayment

The loan is due when the last borrower no longer occupies the property as the principle residence.  At this point, the loan may be repaid either by sale of the home or through other resources (such as savings or applying for a new traditional mortgage).

If your heirs choose to sell the home, they will keep the remainder of the income from the sale after the loan has been repaid.  Your estate has up to 12 months to repay the loan.  This means your heirs can take their time to get the best sales price.