Reverse Mortgages Explained
Beth Burdick, Ashford Mortgage Advisors

1. What is a reverse mortgage? A Reverse Mortgage is a unique loan that enables senior homeowners to convert the equity in their homes into income without having to sell the home, give up title, or take on new monthly mortgage payments. Reverse mortgages are available to individuals 62 or older who own their home free and clear or have a small mortgage balance.
           Seniors will never have to leave their home
           No income qualifications
           No monthly mortgage payments
           No repayment of the loan until the last borrower moves out permanently or passes away
           Loan proceeds are tax free and may be tax deductible upon loan repayment
           Proceeds paid in lump sum, monthly payments, line of credit or any combination

2. How Does a Reverse Mortgage Work?
Loan proceeds available to the borrower are based on three main factors:
           Age of homeowner(s)
           Value and location of home
           Current interest rates
- Loan is repaid at permanent move out, and repayment never exceeds value of home
- Amount repaid is principal, accrued interest, and service fees

3. How are the proceeds from a Reverse Mortgage paid out to borrowers?
All at once, in a single lump sum of cash
As a regular monthly cash advance
As a “credit line” account that lets the borrower decide when and how much of
the available credit line will be paid to them
As a combination of monthly payment and credit line

4. How can homeowners use the proceeds from a reverse mortgage?
Hospital/health care costs
Repay existing mortgages
Reduce burden on children
Home repair/improvement
Pay property taxes
Daily expenses
Travel/Something special
Gifts

5. Common misconceptions about Reverse Mortgages
The lender takes the house
           Homeowner retains full ownership
           Reverse mortgage is a loan
The owner can be thrown out of their home
           Homeowner can stay in home until loan maturity event occurs
           The homeowner can owe more than their home is worth
Homeowner can never owe more than the value of the home. If the amount owed on the Reverse Mortgage is less then the homeowner’s home is worth, the borrower or their estate will keep whatever is leftover.
           The homeowners heirs will be against it
           Experience demonstrates heirs are in favor of reverse mortgages

For a complimentary free consultation clients can call Beth Burdick, with Ashford Mortgage Advisors, at 828-350-8886

Reverse Mortgage Resource List

Publications:
“Home Made Money; A Consumer’s Guide To Reverse Mortgages” available From AARP
“Money From Home; A Guide To Understanding Reverse Mortgages” available From FANNIE MAE

Websites:
www.aarp.prg
www.fanniemae.com
www.fha.gov
www.reversemortgage.org

Counselors:
• Hud Hecm Reverse Mortgages
• Fannie Mae Homekeeper Reverse Mortgages
• Thomas Luzon, On Track Financial Education and Counseling (formerly Consumer Credit Counseling Service Of Western NC) 828-255-5166 ext 118
• Dave Werle, On Track Financial Education and Counseling (formerly Consumer Credit Counseling Service Of Western NC) 828-255-5166 ext 125

Lenders: Beth Burdick, Ashford Mortgage Advisors, 828-350-886 or 828-768-0098 150 Hilliard Avenue, Asheville NC 28801 • BB@AshevilleHomeLoans.com

Reverse Mortgages Explained Beth Burdick, Ashford Mortgage Advisors

Reverse Mortgages Explained
Beth Burdick, Ashford Mortgage Advisors