Modern Reverse Mortgages are one of the fastest growing segments in home lending. These types of mortgages allow most homeowners who are at least 55 years old to borrow against their home equity to get cash or a line of credit from a lender.

Unlike a traditional forward mortgage, monthly loan payments are optional.  You can choose to simply repay the loan when you or your heirs sell the house. The most common type of reverse mortgage is backed by the Federal Housing Administration (FHA).

Popular benefits of a Reverse Mortgage:

  1. Helps Secure Your Retirement: Reverse mortgages are ideal for retirees who want to supplement their retirement income and provide a steady stream of cash flow to help pay for living expenses, medical bills, travel, and other costs.
  2. No Monthly Mortgage Payments: With a reverse mortgage, you can choose to never make monthly mortgage payments. Instead, the loan is repaid when you or your heirs sell the house.
  3. Flexibility: Reverse mortgages offer a lot of flexibility when it comes to how you receive your payments. You can choose to receive a lump sum, monthly payments, a line of credit, or any combination of those options.
  4. Protection from Market Volatility: A reverse mortgage can act as a hedge against market downturns since the loan balance is not affected by the home value fluctuations.
  5. Tax Advantages: Most distributions from a reverse mortgage are tax-free, since they are considered loan advances and not income. This can lower the borrower’s taxable income and potentially increase their eligibility for certain tax deductions or credits.

As with any major financial decision, we recommend you seek the advice of a trusted financial advisor to review your options when considering a reverse mortgage.