A reverse mortgage can help retirees live “on the house” in more ways than one, according to an article from San Diego’s Union Tribune, which reveals some “best-kept secrets” tied to the home equity-tapping loans.
As longevity of life impacts traditional retirement solutions such as pensions and 401(k) plans, the Federal Housing Administration’s (FHA) Home Equity Conversion Mortgage allows borrowers to live “on the house” via their home equity.
While a HECM Saver reverse mortgage allows borrowers to skirt the FHA’s upfront 2% mortgage insurance premium, it does require borrowers to pay smaller premium of their property’s value.
With a reverse mortgage, UT assures borrowers will have payment flexibility in how they choose to receive funds, and can even opt for a line of credit benefit to supplement retirement income.
For those looking to down-size when they retire, a reverse mortgage can also be used to purchase a home, pending certain borrower eligibility requirements.
Written by Jason Oliva