Reverse mortgages are a popular financing option for seniors in Prescott, Arizona that allow homeowners to convert a portion of their home’s equity into cash. As the money is from loan proceeds, as opposed to income, it’s tax-free.*
How Does a Reverse Mortgage Loan Work?
Reverse mortgage loans allow homeowners who are 62 or older to access a portion of the equity in their home without having to make monthly mortgage payments. Instead, the borrower only has to pay property charges like insurance, taxes and home maintenance costs.
Reverse mortgages are a great option for seniors in Prescott, Arizona, who want to stay in their homes, but also want additional cash flow. The funds from a reverse mortgage can be used for nearly any purpose the borrower has in mind, including home improvements, medical expenses or simply having more fun in retirement.
Our Reverse Mortgage Loans in Prescott, Arizona
Home Equity Conversion Mortgage (HECM)
This is the most common type of reverse mortgage loan and is insured by the Federal Housing Administration (FHA). The amount of cash available depends on several factors, including the borrower’s age, the home’s value and interest rates.
HECM for Purchase (H4P)
This type of reverse mortgage loan is for purchasing a new primary residence. It can significantly increase homebuying power and enable borrowers to move somewhere more expensive without having to drain their nest egg. Like a traditional HECM, the borrower does not need to make monthly mortgage payments, so long as they pay property charges like taxes, insurance and upkeep costs.
Jumbo Reverse Mortgage Loan
This type of reverse mortgage is for high-value homes that exceed the HECM loan limit of $1,089,300 set by the FHA. Jumbo reverse mortgage loans are a proprietary product not insured by the FHA, so the terms and conditions can vary depending on the lender. The amount of cash available is based on the appraised value of the home, and borrowers typically have more flexibility in payment options.
Prescott, AZ Reverse Mortgage Loan Benefits
People get reverse mortgages for many reasons, including:
Access To Cash
A reverse mortgage loan can provide an impressive amount of cash flow. The borrower can use it for any purpose, including paying off debt, modifying their home or having more fun in retirement.
Realize Home Equity Gains
Home values reached historic highs in recent years, but how can a homeowner reap the rewards without selling or refinancing their home? With a reverse mortgage loan, a borrower can benefit from their home’s appreciation while remaining the owner and resident.
Buffer Strategy and Portfolio Hedging
Reverse mortgage loan proceeds can be used as a buffer asset to hedge against market downturns. For example, if your investment portfolio experiences losses, you can use the funds from your reverse mortgage to cover your expenses until the market recovers.*
Own and Stay in the Home
Reverse mortgage borrowers remain the home’s owners, and no one can make them leave as long as they comply with the loan terms.
No Monthly Mortgage Payments
With a reverse mortgage loan, borrowers are not required to make monthly mortgage payments. Instead, they must pay property charges, like insurance, taxes and maintenance costs. The loan is a non-recourse loan, which means neither borrowers nor their heirs will owe more than the home is worth when it’s sold, even if the real estate market is much lower than when the loan originated.**
Flexible Payout Options
Borrowers have a great deal of flexibility in how they receive their funds. They can choose a line of credit with guaranteed growth, lump sum, monthly payments or a combination. Most importantly, the proceeds can be used for whatever purpose the borrower wishes.
Government-insured
HECMs are insured by the Federal Housing Administration (FHA), which offers additional consumer protections that you can rely on.
Long-term Care (LTC)
LTC can be expensive, and many people use some of their reverse mortgage loan proceeds to help fund it. For example, some borrowers will use a reverse mortgage loan to modify their home and pay for an in-home caregiver rather than moving to a nursing home or assisted living facility.
Interested in a Reverse Mortgage in Prescott, Arizona?
Fill out the form and Rob or a member of the Kanyur Team will be in touch!
*This advertisement does not constitute tax or financial advice. Please consult a tax and/or financial advisor regarding your specific situation.
**There are some circumstances that will cause the loan to mature and the balance to become due and payable. Borrower is still responsible for paying property taxes and insurance and maintaining the home. Credit subject to age, property and some limited debt qualifications. Program rates, fees, terms and conditions are not available in all states and subject to change.