Saving for retirement is a challenge for many people. They’re not sure how much they should be putting away, and if they’ll have enough to last through their golden years. If you’ve been feeling this way as well, it’s time to take control of your future with the revolutionary reverse mortgage solution – the reverse mortgage 55+ program.
With the new loan program, you no longer need to be age 62 or older to qualify for a reverse mortgage. Now, more people can get the funds they need without having to wait for another 7 years! In this article, we’ll take a look at this innovative loan product and discuss its pros and cons.
The new reverse mortgage 55+ loan program provides people them the opportunity to enjoy financial independence today without having to wait until they turn 62. Other key benefits besides lower age limits include access to more capital, lower closing closes, and flexible proceed options. Now, you can get the funds you need without having to wait.
Top Benefits of the Reverse Mortgage for 55+ Program
Lower Age Limits
While most lenders require that you be 62 or older to qualify for a reverse mortgage, the new program allows people 55 and over to access their home equity without having to wait 7 more years. This means you can get funds now so you can enjoy financial freedom today. Now even some Generation X (people born in 1965 – 1980) can now take advantage of this innovative financing option.
Larger Loan Proceeds
You can access up to $4 million of equity in your home when you apply for the new reverse mortgage program. This is a vast improvement from most conventional reverse mortgage loans limits at $822,375 (2021). With the much larger loan limit, you can now use the funds to enjoy more financial flexibility in retirement.
Eliminate or Reduce Your Current Mortgage Payment
You can lessen the financial burden of your monthly payment by using the funds you access with the reverse mortgage program. You can also eliminate or reduce your current mortgage payments when you pay off your debts with the proceeds from the loan. As a result, this will give you greater options to manage your debt, lower your stress levels, and help you to enjoy more of the golden years.
Lower Up-front Costs
The new loan program will also subject you to lower up-front costs which include origination fees and mortgage insurance premiums. The lower costs help reduce the overall cost of the loan and make it easier to get the funds you need quickly.
Flexible Proceeds Options
Another benefit of the new loan program is that it allows for flexible proceeds options which can be tailored to meet your specific needs. With this benefit, you can get the money you need in one lump sum, term payments, or line of credit that grows over time.
Non-Recourse Loan
Unlike with the traditional home equity loan, you won’t be responsible for any balance remaining after you sell your home or die. This means you’ll never owe more than the value of your property.
How to qualify
The qualification for this loan program is similar to a traditional reverse mortgage program except there are some important differences to be aware of.
Here’s a list of key requirements
- You must be 55 or over & resident in a qualifying state*
- Your home must be the primary resident
- You must have at least 50% equity in the home
- Be able in good standing with your loan obligations
- Complete reverse mortgage counseling
*California and selected states qualify
Reverse Mortgage 55+ vs. Traditional Reverse Mortgage
Below are some key differences between the traditional HECM (Home Equity Conversion Mortgage) loan and the new program for 55+
| Column Name | Home Equity Conversion Mortgage (HECM) | Reverse Mortgage 55+ |
|---|---|---|
| Minimum age to qualify | 62 | 55 |
| Limit on amount of proceeds you can take in the first 12 months | YES | NO |
| Non-recourse feature | YES | YES |
| How much can be borrowed? | Less than $822,375 | Up to $4 Million* |
| Mortgage Insurance Premium cost | Upfront and ongoing | NONE |
| Condominium eligibility | FHA-approved condominium communities only | Community can be FHA-approved, Fannie Mae-approved or RMF-approved-so more condos qualify |
| Closing Costs | Lender closing costs apply | Lender credit to be applied toward most closing costs |
Things to be aware of
While this program does have a lot of benefits, is not currently available in all states at this time. California happens to be one of the primary states listed as qualified so this could be an excellent opportunity for Californians who would like to take advantage of this program. If you are considering applying, here are some key factors to keep in mind.
The loan must be paid off when the borrower or spouse leaves the home permanently, moves out on long-term care, passes away. The home equity loan proceeds can affect your Social Security benefits, Medicaid, and SSI. While the new program is an excellent option for some, it isn’t right for everyone. If you are considering applying for this new loan program, make sure to speak with a Reverse Mortgage Specialist today.
Getting started
The process of getting started is as simple as contacting your reverse mortgage specialist to get a free, no-obligation assessment. Once you provide your basic information over the phone or online, he/she will contact you with a quote of all costs involved and an explanation of how it works. From there, they can walk you through the process so you can make an informed decision about whether this is the right move for you.
The Bottom Line
The reverse mortgage program for people 55+ is one of a number of innovative mortgage solutions that came on in recent years. It can help you manage debt, improve your financial security, and enjoy life more in your golden years. If you are nearing retirement and thinking about how to make your mortgage payments more manageable, a reverse mortgage for 55+ may be the answer.
If this sounds like something you would benefit from, consider speaking with a Reverse Mortgage Specialist today for more information on eligibility requirements. With a Reverse Mortgage Specialist by your side, the process of getting started is effortless and stress-free.
