Breaking Down The Reverse Mortgage

Breaking Down The Reverse Mortgage


  • Retirees or those approaching retirement, may be thinking about how to make the most of the years ahead without financial stress. A reverse mortgage loan can be a valuable retirement tool for your customers, plain and simple: They’re designed to help retirees. Due to inflation, market fluctuations and the growing cost of living, many retirees are concerned about outliving their retirement savings. But with a reverse mortgage, borrowers can leverage home equity as needed.
  • The reverse mortgage involves a meticulous process. Lenders are required to perform a thorough financial assessment on each application, ensuring borrowers have the means to meet the ongoing loan obligations. And as part of the loan process, prospects must also meet with an independent, FHA-approved counselor to objectively ensure they understand the reverse mortgage process, what it entails and the terms of the loan.
  • There are borrower protections in place. A Home Equity Conversion Mortgage (HECM is an FHA-insured non-recourse loan, so borrowers will never owe more than the home is worth when the loan is repaid.
  • There is no interference with Social Security. While regular Social Security or Medicare are generally not affected by reverse mortgages, needs-based benefits (such as Supplemental Security Income or Medicaid) may be impacted. You’ll want to consult a financial professional or government benefits specialist about your specific situation. You can also visit
  • You can use the reverse mortgage strategically and be a savvy homeowner. Think of it this way: There are different types of loans for different situations and stages of life — for example, student loans and first-time home buyer loans — and this is a loan designed specifically for older homeowners to give them more financial flexibility.

Can a reverse mortgage benefit you in any of these ways? Contact Eva Cutler, Covenant Reverse Mortgage today to find out how you can take advantage of the reverse mortgage options.

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Covenant Reverse Mortgage, LLC
211 E Logan Street
Caldwell, ID 83605
This material is not from HUD or FHA and has not been approved by HUD or a government agency.
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When the loan is due and payable, some or all of the equity in the property that is the subject of the reverse mortgage no longer belongs to borrowers, who may need to sell the home or otherwise repay the loan with interest from other proceeds. The lender may charge an origination fee, mortgage insurance premium, closing costs and servicing fees (added to the balance of the loan). The balance of the loan grows over time and the lender charges interest on the balance. Borrowers are responsible for paying property taxes, homeowner’s insurance, maintenance, and related taxes (which may be substantial). We do not establish an escrow account for disbursements of these payments. A set-aside account can be set up to pay taxes and insurance and may be required in some cases. Borrowers must occupy home as their primary residence and pay for ongoing maintenance; otherwise the loan becomes due and payable. The loan also becomes due and payable (and the property may be subject to a tax lien, other encumbrance, or foreclosure) when the last borrower, or eligible non-borrowing surviving spouse, dies, sells the home, permanently moves out, defaults on taxes, insurance payments, or maintenance, or does not otherwise comply with the loan terms. Interest is not tax-deductible until the loan is partially or fully repaid.