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Loan Programs
As seniors seek to live out their retirement years in comfort, they often find their lifestyles altered by unexpected emergencies, rising debt and ensuing expenses. For those living on a fixed income, such costs can be financially crippling; often forcing seniors to lower their standard of living or sell their home. However, reverse mortgages offer seniors the opportunity to remain in their home for life. A reverse mortgage is a loan that enables senior homeowners to convert part of the equity in their home into tax-free income without having to sell their home, give up the title or take on a new monthly mortgage payment. To be eligible for a reverse mortgage, the primary borrower and any co-borrowers must: • Be at least 62 years old • Occupy the home as a primary residence • Own the home free and clear or have a small remaining mortgage balance which could be paid off with the proceeds from a reverse mortgage A reverse mortgage provides flexible payment options allowing seniors to choose how to receive their proceeds: • Lump sum for immediate needs • Monthly payments to supplement income • Growing line of credit for future expenses • Or any combination of the above Senior homeowners can use these funds as they wish—to supplement retirement income, pay off existing liens, cover medical expenses, make home improvements or even take a vacation. For example, a 75-year-old single female who owns a $150,000 home free and clear could receive $613 a month for as long as she lives in her home or $92,667 in a lump sum payment or growing credit line account through the HUD-insured Home Equity Conversion Mortgage (HECM) program.* Unlike conventional mortgages, no income, employment or credit score requirements exist. The maximum loan amount will differ depending on the option selected. However, all reverse mortgages take the following factors into consideration to calculate the payment amounts available: • Age of the youngest homeowner • Current interest rate • Market value and location of the home Most importantly, no monthly payments are made on a reverse mortgage during its term. It simply becomes repayable when the home is sold or vacated. Any excess proceeds belong to the homeowner or the estate. Homeowners with a reverse mortgage never owe more than the value of their homes or the amount borrowed under terms of the loan, whichever is less. A reverse mortgage is a privilege of longtime homeownership and an opportunity for eligible seniors to ease their financial burden, secure independence and promote peace of mind. For more information about reverse mortgages, contact Dan Smith at 303-674-2205. *For illustration purposes only based on rates as of Sept. 18, 2003. Neither ColoradoHomeLoans.com nor any of its representatives may give tax advice. Please consult your tax advisor for information about your particular circumstance. © Copyright 2004-2007 by ColoradoHomeLoans.com |
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