Peaches N. Jensen
PeachTree Financial Corporation
Yes, it is possible to have a mortgage without ever having to worry about a payment! And there’s a great solution out there that’s been around for decades! In fact, it’s so robust that it can help you finance the purchase of a new home, eliminate your current mortgage payment, get some cash or even set-up an equity line — again, all without a mortgage payment. So what is it? It’s called a Reverse Mortgage. Here’s how it works:
Say you’re 64 years old and want to do one of the following:
Buy a New Home
You want to buy a new home. However, you don’t want a mortgage payment, and you also don’t want to pay all cash for your new home. A reverse mortgage might just fit the bill. For example, if the new home you’re trying to buy is priced at $700,000, and you’re willing to make a down payment of around $400,000, that new home might just be yours!* And all without a mortgage payment — ever! This program works well for retirees moving to a new community or simply buying a new home in their local community.
Eliminate Your Mortgage Payment
You want to improve your monthly cash flow, so eliminating your current mortgage payment is a great place to start. Say your home is worth $700,000 and you currently owe around $280,000. Refinancing into a reverse mortgage would take your monthly payment down to zero!** And in many cases, you can still get an equity line even if you’re carrying a balance on your current mortgage.
Set-up an Equity Line to Fund Current or Anticipated Expenses
You want to set-up an equity line to cover some current or anticipated expenses. Using the same $700,000 home value and assuming your residence is free and clear of liens, you would potentially be qualified for an initial equity line of around $280,000. Why do we say “initial”? Because the equity line actually grows over time. And you get all this without a mortgage payment!** Better yet, a reverse mortgage equity line cannot be frozen, reduced or revoked by the lender.
So what basic requirements apply to a reverse mortgage?
— You must be at least 62 years old.
— You must live in the home as your primary residence.
— You do not have to pay back the reverse mortgage until you sell your home or no longer live there.
— The property taxes, insurance and other property charges must be paid in a timely manner.
— The property must be maintained to FHA standards.
If any of this sounds interesting and you’d like more information, give us a call!
*Required down payment is an estimate only. Actual down payment will depend on your particular circumstances.
**All figures are estimates. Your situation may be different.