Trebor can help with your reverse mortgage
We know from firsthand experience how overwhelming it can be to deal with reverse mortgages. However, we also know that it doesn’t have to be this way. Trebor specializes in helping you understand all of your mortgage and financing options so you can make smart and informed decisions. Get in touch with us today to see what we can do for you.
Over 20 years of experience
We have been processing reverse mortgages since 2000 when they first became available in the state of Texas. Working with Trebor means having our personal support for a variety of services as well as the knowledge and resources that come with years of experience in the mortgage industry.
A reverse mortgage is a Home Equity Conversion Mortgage loan, also know as a HECM loan, available to homeowners, 62 years or older, that allows them to convert part of their equity savings in their home into cash.
The loan is called a reverse mortgage because instead of making monthly payments to a lender, as with a traditional mortgage, the lender makes payments to the borrower.
The borrower is not required to pay back the loan until the home is sold or otherwise vacated. As long as the borrower lives in the home, he or she is not required to make any monthly payments towards the loan balance.
With a Reverse Mortgage, the borrower is only responsible for typical property expenses such as taxes, insurance, and HOA costs. A HECM to HECM refinance is a simple reset of an existing reverse mortgage where the previous Reverse Mortgage is paid off and a new Reverse Mortgage takes its place.
A HECM for purchase allows seniors age 62 and older to purchase a new principal residence without required monthly mortgage payments. Senior homeowners use the proceeds from a HECM for purchase, plus the equity from the sale of a previous residence, to buy their next primary home. This is completed in a single transaction with one initial investment (cash payment).
Benefits of a Reverse Mortgage
You remain the owner of your home
A common misconception is that the lender takes ownership of your home. This is false. You continue to maintain ownership of your home, as long as you comply with the terms of the loan and pay your property taxes and homeowner’s insurance. You maintain ownership until you move, sell your home, or the last borrower leaves.
Grow your money over time
Many customers are taking advantage of a reverse mortgage for the credit line growth rate. If you select this option your credit line will grow yearly based on the balance in the line of credit. This means if you don’t take money from your line of credit it will continue to increase in amount year over year allowing you to have an increasing amount of money available.
Eliminate your monthly mortgage payment
One of the most attractive benefits of reverse mortgages is that payments are made TO you, as long as you live in your home. This is quite different from a traditional forward mortgage where you must pay funds in a monthly amount. With reverse mortgages, you receive available funds whenever needed. The loan is repaid when you sell your home, move to another primary residence, or when the last borrower leaves the home.
You don’t have to pay taxes on the income
The income you get from a reverse mortgage isn’t taxable because the IRS considers the money “loan proceeds.” At the same time, reverse mortgage interest isn’t deductible until you actually pay it (usually when you pay off the loan in full). Tax rules can be complicated, however, so be sure to see a tax professional for advice before committing to a reverse mortgage.
Never owe more than what the home is worth
Because a reverse mortgage balance grows in size, it’s possible that it can exceed the fair market value of the property over time. However, the amount of debt that must be repaid can never exceed the property’s value. A reverse mortgage is an example of “non-recourse” financing. The result is that a mortgage lender can have no claims against your other assets or heirs.
Your heirs have options
Reverse mortgages can be paid off by borrowers sooner but typically end when the borrower moves, sells the home or passes away. In an estate situation heirs have several choices: They can sell the property to repay the debt and keep any equity above the loan balance, they can keep the home and refinance the reverse mortgage balance if the property’s value is sufficient or heirs can settle the loan by giving the title back to the lender.