About MLS Reverse Mortgage
What is a Reverse Mortgage?
A reverse mortgage is a loan program designed to enable homeowners 62 years and older to convert part of the equity in their homes into tax-free cash flow* without having to sell the home, give up title, or take on a new monthly mortgage payment. Instead of making monthly payments to the lender, as with a regular mortgage, the lender makes payments to you. You are required to pay your property taxes, insurance and any other charges associated with your property. Visit the Reverse Mortgage FAQ section to see a list of the most commonly asked questions.
|Monthly Adjustable||3.553% – 4.303%*|
|Annual Adjustable||4.150% – 4.90%*|
|Fixed Rate||4.50%||*APR Example – 4.50% Fixed Rate, appraised value $250,000, initial principal limit of $152,500. APR would be 6.097%, including the 1.25% annual MI.|
Rates as of 1/16/2018 View Rate Sheet and APR details
*Why the rate spread? Everyone’s loan scenario is different and rates play an important part in the reverse mortgage loan. Someone who is concerned about maximizing their cash may choose a higher rate. A higher rate to a certain extent means that your loan balance will grow faster, but it also means that the unused line of credit will grow faster, allowing for more proceeds in the future. Someone else may have a goal of equity preservation and as such, may opt for a lower margin. A phone call to us to discuss your scenario will be best in order to help determine the right fit for you.
Fixed Rate Lump Sum: For borrowers looking to take a full draw of their reverse mortgage proceeds, the fixed rate reverse mortgage will generally provide thousands more than the adjustable reverse mortgage. Those looking to payoff a large existing mortgage or to use the money immediately should consider the fixed rate option.
Adjustable Rate Credit Line: Unlike Home Equity Lines of Credit offered by your local bank, the line of credit cannot be closed or frozen. The line also increases in availability each month based on the unused portion.
Tenure Payment Plan: Sometimes referred to as an “annuity mortgage”, the proceeds made available to you may be structured into monthly installments guaranteed for life as long as you occupy the home as your primary residence and make required tax and insurance payments.
Working with a Realtor? Odds are, your Realtor or the sellers may have several questions about how the HECM for purchase works. We would love to help educate them to help streamline the process and remove all confusion from the purchase transaction. We have closed several purchase reverse mortgages and welcome your questions.