Your Financial Future:
Educate yourself about reverse mortgages and other financial decisions you will make as a homeowner.
Reverse Mortgage 101:
- A reverse mortgage is a way for homeowners to borrow against the equity or value of their homes.
- It is a mortgage that pays you a loan - you can receive the loan as a line of credit, a lump sum or a series of monthly payments.
- It works in the reverse of a conventional or forward mortgage. With a reverse mortgage, each time you receive a payment, your equity in your home decreases and your debt increases.
- You never have to repay a reverse mortgage as long as you live in your home.
- Upfront costs include an origination fee, mortgage insurance premium and closing costs.
- Reverse mortgages can be very expensive in the short term.
- They are less costly the longer you have them.
- A reverse mortgage through the Home Equity Conversion Mortgage (HECM) program is generally the last expensive. Plus, it is federally insured. However, the other two types have higher limits.
Other Housing Resources:
My Home by Freddie Mac
This consumer education website is a resource for those who want to learn more about how to apply for a loan, understand the closing process, sell a home, and succeed as a long-term homeowner. My Home also includes resources for renters, including rent calculators, information about the rental process, and more.