Retire in a Home that's Right for You
A reverse mortgage is a way to turn the equity in your home into
cash which is usually tax free* without having to make monthly
mortgage payments. Instead of monthly payments, the loan is taken
against a senior's home equity and repaid in one lump sum when the
last borrower leaves the home. As part of the loan, the borrower
is required to continue paying property taxes, insurance and
maintenance (and HOA fees, if applicable). These loans can
potentially help seniors gain financial independence from
increasing living expenses.
information does not constitute tax advice. Please consult a tax
advisor regarding your specific situation.
Reverse Mortgage Eligibility
borrower must be 62 years or better
your home and have equity
- Home is
required to be your primary residence (live in your home 6+
months per year)
Property must be a single-family home, 2- to 4-unit dwelling
or FHA-approved condo
- For a
home purchase, you must have an adequate down payment for your
new home based on your age*
available in all areas. Please contact your Fairway reverse
mortgage planner for more details.
credit score requirements, some income and credit
qualifications apply to ensure you have the ability to pay
taxes and insurance
Potential Advantages of a Reverse Mortgage
Receive money from your home equity which is usually tax
mortgage makes payments to you from your accumulated home
equity, which may enhance and extend your retirement goals.
You can receive your money in a lump sum, line of credit,
monthly payment or a combination of all three. However, if you
choose a line of credit, you may have the option of paying
down the line if you want to have less cash and increase your
This information does not constitute tax advice or financial
planning advice. Please consult a tax advisor for tax advice
and a financial planner regarding enhancements to retirement
Eliminate your monthly mortgage payment.
With a reverse mortgage, you will not be required to make a
monthly payment during your lifetime as long as you live in
your home, pay taxes and insurance, and maintain the home (and
pay HOA fees, if applicable).
Never owe more than what the home is worth.*
When you permanently move out of your home, whether you sell
it or pass away, neither your estate nor your heirs are
responsible to pay the deficit if the balance owed on your
reverse mortgage exceeds the home value. If your heirs want to
keep your home, they can purchase it for 95% of the current
*There are some circumstances that will cause the loan to
mature and the balance to become due and payable. Borrower is
still responsible for paying property taxes, insurance and
maintenance (and HOA fees, if applicable). Credit is subject
to age, property and some limited debt qualifications. Program
rates, fees, terms and conditions are not available in all
states and subject to change.
Bridge the Medicare gap from age 62 to 65.
Many seniors delay retirement until they are 65, because they
cannot afford to pay for their health insurance before
Medicare kicks in. By utilizing proceeds from a reverse
mortgage, you can avoid paying income tax on money drawn from
your IRA or other accounts to help keep your retirement
funding plan* in place without diminishing your current
*This information does not constitute financial planning
advice. Please consult a financial planner regarding
enhancements to retirement plans.
Delay Social Security payments to increase monthly income.*
Since proceeds from a reverse mortgage do not count toward
your income, you can delay taking money out of your IRA and
avoid paying additional penalties and/or taxes. If you have
not drawn Social Security yet, you should consider discussing
this with your financial and tax advisors.
*This information does not constitute tax or financial
planning advice. Please consult a tax advisor and/or financial
planner regarding your specific situation.
for long-term care expenses.
With the proceeds from a reverse mortgage, you could purchase
long-term care insurance to handle these expenses without
losing your home in the process
Types of Reverse Mortgages
Proprietary Reverse Mortgages
Private loans backed by the companies that develop them.
Equity Conversion Mortgages (HECMs)
Federally-insured reverse mortgages backed by the U. S. Department
of Housing and Urban Development (HUD). HECM loans enable you to
withdraw a portion of your homeÃ¢â‚¬â„¢s equity and can be used for any
purpose. How much you can borrow with a HECM or proprietary
reverse mortgage depends on several factors, including:
type of reverse mortgage you select
appraised value of your home
interest rates, and
financial assessment of your willingness and ability to pay
property taxes and homeownerÃ¢â‚¬â„¢s insurance.
Equity Conversion Mortgage for Purchase (H4P)
An H4P (a type of HECM backed by the FHA) enables senior
homebuyers to purchase a new primary residence that better suits
their needs and obtain a reverse mortgage in one transaction. You
can use an H4P if you are able to use cash on hand to pay the
difference between the HECM proceeds and the sales price plus
closing costs for the property you are purchasing. This type of
HECM reverse mortgage, if it is offered in your area, may allow
- Build a
new customized home
Relocate closer to friends and family members
Purchase a home in senior housing community
Downsize to a smaller, easier-to-maintain home
Purchase a primary residence suitable for your current needs
into a new home thatÃ¢â‚¬â„¢s easily accessible with modern amenities
If you are interested in a loan, please contact your local Fairway