A reverse mortgage lets Arizona homeowners 62 and older turn part of their home equity into cash while they keep living at home. No monthly mortgage payment is required, though property taxes, insurance and upkeep continue.
A home loan, most often for homeowners 62 or older, that turns part of your home equity into cash. You keep living in your home, and no monthly mortgage payment is required.
Homeowners who want to pay off an existing mortgage, add to retirement income or keep a cash reserve for healthcare and home costs, while staying in their home.
You choose a lump sum, monthly payments, a line of credit or a mix. Interest and fees are added to the balance, repaid when the last borrower sells, moves out permanently or passes away.
Most borrowers use an FHA insured HECM. Private jumbo loans suit higher value homes, and some state or local agencies offer single purpose loans for repairs or property taxes.
No required monthly mortgage payment, loan proceeds that are not taxed as income, an unused credit line that can grow over time, and you never owe more than the home is worth.
It can fit if you plan to stay in your home for years and can keep up with property taxes, insurance and upkeep. Mark walks you through the costs and alternatives first.
Mark Boeck, Retirement Mortgage Advisor (NMLS #107448), has more than 25 years in mortgage lending and works with Arizona homeowners 62 and older. Working with Mark means:
Straight answers to the questions Arizona homeowners ask most: who qualifies, what it costs, how you receive the money and how the loan is repaid.
A reverse mortgage lets homeowners 62 or older turn part of their home equity into cash while they keep living in the home. Most are Home Equity Conversion Mortgages (HECMs) insured by the FHA. No monthly mortgage payment is required, but interest and fees are added to the balance, and you still pay property taxes, homeowners insurance and upkeep.
For a HECM, the youngest borrower must be at least 62, the home must be your principal residence, and you need enough equity to pay off any existing mortgage. You also complete counseling with a HUD approved counselor, and the lender checks that you can keep paying property taxes, insurance and upkeep.
You can take a lump sum, monthly payments for a set term or for as long as you live in the home, a line of credit, or a mix of these. Each option affects how fast the balance grows, so Mark reviews them against your plans before you choose.
No monthly mortgage payment is required while you live in the home and meet the loan terms. You can make voluntary payments at any time to slow the growth of the balance. You must keep paying property taxes, homeowners insurance, any HOA dues and maintenance.
The loan becomes due when the last borrower sells the home, moves out permanently or passes away. Your heirs can sell the home and keep any equity above the balance, or keep it by paying the balance or 95% of the appraised value, whichever is less. They never owe more than the home is worth.
In most cases, no. The IRS treats reverse mortgage money as loan proceeds, not income, and it does not affect Social Security or Medicare. Needs based benefits such as Medicaid or SSI can be affected by how you hold the money, so check with a tax adviser or benefits specialist.
You keep title as long as you live in the home and meet the loan terms. The loan can become due, and the home can go to foreclosure, if property taxes or insurance go unpaid, the home is not maintained, or you live elsewhere for more than 12 months in a row. Counseling and Mark’s review cover these responsibilities before you commit.
There is no fixed percentage. The amount you can borrow depends on the age of the youngest borrower, current interest rates and your home’s value up to the FHA lending limit. Any existing mortgage must be paid off at closing from the proceeds or your own funds, so more equity leaves more room.
HECMs can be used on single family homes, homes with two to four units where you live in one unit, townhomes, FHA approved condominiums, and manufactured homes built after June 15, 1976 that meet FHA standards. The home must be your principal residence.
Costs include an origination fee (the FHA caps it at $6,000), an upfront FHA mortgage insurance premium of 2% of the home’s value up to the lending limit, an annual premium of 0.5% of the balance, interest, closing costs and in some cases a servicing fee. Most costs can be paid from the loan, which reduces the money available to you.
Your heirs inherit the home. When the loan is due they can sell it and keep any equity above the balance, pay off the loan to keep it, or let the lender take the home. FHA insurance covers any shortfall, so heirs are not personally liable if the balance is higher than the home’s value.
Yes, when the new loan gives you a clear benefit, for example more available funds after your home value has risen, a better rate, or adding a spouse who has turned 62. A refinance has new costs, so Mark compares the benefit with the cost before you decide.
Other options include a home equity line of credit, a home equity loan, a cash out refinance, downsizing, or local programs for seniors. Most of these require monthly payments, so a HUD approved counselor or Mark can help you compare them side by side.
