Is a Reverse Mortgage Right for You?

Financial planning for retirement usually involves savings, investments and Social Security. As life expectancy increases, many retirees worry about the longevity of savings and investment income. The ability to leverage home equity could extend financial security, and reverse mortgages are an increasingly popular option among homeowners and financial advisors.

Most reverse mortgages are Home Equity Conversion Mortgages (HECMs) that are insured by the Federal Housing Administration (FHA). You will often hear the terms (reverse mortgages and HECMs) used interchangeably. Available exclusively to people age 62 and older, a reverse mortgage could help you prepare for the future and live more comfortably while doing so.

A reverse mortgage can be a valuable tool in the following scenarios…

Avoid selling investments at a loss in a “down” market
Establishing a “stand-by” line of credit that you can tap as needed
Supplement retirement income with tax-free* funds
Delay collecting Social Security, for a larger monthly benefit

Pay for medical or long term care costs
Finance the purchase of a more suitable home, with no monthly mortgage payments**

Benefits of a reverse mortgage include...

The ability to use your home equity to help you maintain a more comfortable standard of living, in your own home.
You will receive tax-free* loan proceeds that you can use however you choose.
Great flexibility… You can take your proceeds as a line of credit; monthly advances for a set period of time; a monthly stream of funds for as long as you live in your home; a lump sum; or a combination of these options.

No monthly mortgage payments.** If you qualify and have an existing mortgage, home equity loan or any other type of debt, you can pay it off and reduce your monthly expenses. Or, if you own your home free-and-clear, you can get the additional funds you need with no minimum monthly repayments required. As the homeowner, you remain responsible for paying property taxes, homeowners insurance, and homeowner’s association dues if applicable.***

To qualify for a reverse mortgage in the state of South Carolina, you must…

Be at least 62 years old
Live in the home as your primary residence
Not be delinquent on any federal debt

Participate in a consumer information session held by an independent counselor who’s approved by the U.S. Department of Housing and Urban Development (HUD)