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Reverse Mortgages Explained
Reverse mortgages are an excellent choice for homeowners age 62 and
older who have an appreciable amount of home equity or own their home outright.
Reverse mortgages dramatically improve the senior homeowner's quality of life
by putting their equity to work. Reverse mortgages also allow the homeowner to
hold on to their best performing asset - their home!
Seniors can receive cash, a monthly income stream and/or a credit
line by tapping the equity in their home with reverse mortgages. The U.S.
government and major financial institutions back these loans, and they don't
have to be repaid until the house is no longer occupied as the senior's primary
residence.
RLCA offers reverse mortgages through the Federal Housing
Administration, Fannie Mae, and also several jumbo loan programs for higher
valued properties.
Here are some of the key features of the reverse mortgages we
offer:
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No Monthly Payments
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Require no repayment of any kind until you permanently leave your
home.
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No Income Or Credit Requirements
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The amount of money available is calculated based on age, property
value and interest rates. Credit worthiness and credit history are not factors
in determining the amount of money available to the homeowner. The higher the
borrower's age and/or property value, the more money available to the borrower.
Also, the lower the applicable interest rate, the more money available to the
borrower.
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Multiple Safeguards In Place To Protect The Borrower
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There are a variety of safeguards to protect the borrower. For
example, today's programs have interest rate caps, caps on all fees, and
require full disclosure on all fees. They also require that the homeowner
attend a free counseling session with an independent counselor approved by HUD
to do counseling. Finally, these loans are insured so that the homeowner will
never owe more than their home is worth no matter how long they live in their
property. These safeguards ensure that the homeowner always retains the title
to their property, mitigates the risk of interest rate increases, and ensures
that all fees are understood.
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Proceeds Are Distributed Tax Free
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Proceeds are not considered income, so in general there are no tax
consequences for the borrower (consult with your tax advisor to verify based on
your specific situation). These funds will not affect your social security or
Medicare benefits and will not be taxed by the IRS.
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