Reverse Mortgage Loans
Are Reverse Mortgages Right For You?
Reverse Mortgages
These loan programs are available to customers over 62 years of age to help improve financial security, quality of life and ease of mortgage payments. The total amount of money you can receive from your house is limited and determined by the age of the youngest borrower or eligible non-borrowing spouse, the value of the house, and the interest rate at the time of closing.
- Improved cash flow - improved quality of life
- Pay off your current mortgage
- Receive lump sum cash at closing
- Receive cash as needed
- Receive a monthly check
Money Received is Not Taxable
Because the money received by the borrower is not income, there are no income taxes to pay and the money received can be used for any purpose.
- Pay for basic living expenses
- Purchase long-term care insurance
- Pay for medical expenses not covered by insurance
- Help finance your grandchildren's education
- Fulfill lifelong dreams that were previously unreachable
Homeowner Maintains Ownership Of The Home
Since the owner retains all ownership rights, any appreciation in the value of the home belongs to the homeowner. Because the borrower retains ownership, they must comply with the loan terms which include occupying the home as their primary residence, paying taxes and insurance, and maintaining the property.
In many cases, despite the interest being charged on the outstanding balance of a reverse mortgage, the homeowner’s equity in the property actually grows over time. This is possible because interest is only charged on the outstanding balance of the loan, whereas the rate of appreciation of property values operates on the full value of the home.
Reverse mortgages for Durango and La Plata County homeowners
I’m Peter Pritchard, and I’ve helped Durango-area families with home loans for 28 years. A reverse mortgage can be a good tool for some homeowners 62 and older, and the wrong one for others. I’ll walk you through it honestly, and I’m glad to meet with your adult children or financial advisor too.
How a reverse mortgage works
- Most reverse mortgages are FHA-insured Home Equity Conversion Mortgages (HECMs).
- You keep the title to your home. No monthly mortgage payment is required.
- You still pay your property taxes, homeowners insurance and any HOA dues, keep the home in good repair, and live in it as your primary residence.
- The loan comes due when the last borrower sells, moves out permanently or passes away.
- A HECM is non-recourse: neither you nor your heirs will owe more than the home is worth when it’s sold.
- Before you apply, federal rules require a counseling session with an independent HUD-approved counselor.
The trade-offs to understand
- Upfront costs include FHA mortgage insurance and closing costs.
- Interest builds on the balance over time, so there is usually less equity left for heirs.
- If taxes, insurance or upkeep aren’t kept current, the loan can come due.
Ways Durango homeowners use them
- Pay off an existing mortgage to free up monthly cash flow
- Set up a line of credit for future health care or home repairs
- Buy a home that fits retirement better, such as a single-level house closer to town, with a HECM for Purchase
Questions? Call or text me at 970-828-1610, stop by 1099 Main Avenue, Suite 305 in Durango, or send me a message.
Not sure where to start? See how I compare mortgage lenders in Durango for you.
Peter Pritchard NMLS #404172 | Animas Mountain Mortgage Inc. NMLS #1742747 | Equal Housing Opportunity. Borrowers must be 62 or older, occupy the home as a primary residence, and remain current on property taxes, insurance and maintenance. This material is not from HUD or FHA and was not approved by HUD or a government agency.