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Reverse Mortgages
What is a reverse mortgage?
A reverse mortgage is a home loan (used for any purpose) where seniors, 62
and older, can access the equity (cash) built up in their home.
There are several different reverse mortgage programs. Fannie Mae Home Keeper®,
Jumbo Cash-Out loan, and the HUD-insured Home Equity Conversion Mortgage (HECM)
are three such programs. As demand increases, more reverse mortgage programs from
different organizations will become available.
It is called a reverse mortgage because you borrow money from a lender, but
the lender makes monthly payments to you, rather than you making monthly payments
to the lender. All interest is paid at the end of the loan, rather than in the
beginning.
What are some of the benefits of a reverse mortgage?
- Strengthen your personal and financial independence.
- Help pay for health care or other needs.
- You can never lose your home in foreclosure as long as you maintain the property
tax and insurance payments.
- The loan is only paid off when the house is sold by you or your heirs, or
all borrowers move out of the house.
- Keep your Medicare or Social Security benefits.
- Use it as a credit line and draw upon it as needed.
- Get all your cash right away.
- Get the best of both—get cash now and have a balance in reserve to use
as a credit line.
- No Income Requirements: The homeowner does not need to be working and is not
qualified based on income.
As the homeowner receives monthly cash income, the loan balance increases.
In the following twelve-month example, the homeowner begins with a debt-free home.
As money is received by the homeowner, the mortgage grows. By the end of month
twelve, the homeowner owes the bank $6,000 plus $232.44 interest. All Reverse
Mortgage loans have a variable rate.
Assumptions*
| Regular monthly advances |
$500 |
| Annual interest rate |
7.0 % |
| Monthly interest rate |
.583% (.07 / 12) |
| 0 |
0 |
0.00 |
0.00 |
$500.00 |
| 1 |
$500.00 |
$2.92 |
$502.92 |
$500.00 |
| 2 |
$1,002.92 |
$5.85 |
$1,008.77 |
$500.00 |
| 3 |
$1,508.77 |
$8.80 |
$1,517.57 |
$500.00 |
| 4 |
$2,017.57 |
$11.77 |
$2,029.34 |
$500.00 |
| 5 |
$2,529.34 |
$14.75 |
$2,544.09 |
$500.00 |
| 6 |
$3,044.09 |
$17.76 |
$3,061.85 |
$500.00 |
| 7 |
$3,561.85 |
$20.78 |
$3,582.63 |
$500.00 |
| 8 |
$4,082.63 |
$23.82 |
$4,106.44 |
$500.00 |
| 9 |
$4,606.44 |
$26.87 |
$4,633.31 |
$500.00 |
| 10 |
$5,133.31 |
$29.94 |
$5,163.26 |
$500.00 |
| 11 |
$5,663.26 |
$33.04 |
$5,696.29 |
$500.00 |
| 12 |
$6,196.29 |
$36.15 |
$6,232.44 |
$500.00 |
*Many criteria are considered when determining the reverse mortgage loan amount,
interest rate, etc.
 Trenton Mortgage, Inc. - 11222 Richmond Avenue, Suite 235 - Houston, TX 77082 Office Phone: 713.781.0700 Fax: 713.917.7700
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We lend in the following states: TX
Hancock Mortgage Partners, LLC SHOULD COMPLETE, SIGN, AND SEND A COMPAINT FORM TO THE TEXAS SAVINGS AND LOAN DEPARTMENT, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705.COMPLAINT FORMS AND INSTRUCTIONS MAY BE DOWNLOADED AND PRINTED FROM THE DEPARTMENT'S WEB SITE LOCATED AT WWW.TSLD.STATE.TX.US OR OBTAINED FROM THE DEPARTMENT UPON REQUEST BY MAIL AT THE ADDRESS ABOVE,BY TELEPHONE AT ITS TOLL-FREE CONSUMER HOTLINE AT 1-877-276-5550, BY FAX AT (512) 475-1360, OR BY E-MAIL AT TSLD@TSLD.STATE.TX.US. THE DEPARTMENT MAINTAINS THE MORTGAGE BROKER RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN TYPES OF JUDGEMENTS AGAINST A MORTGAGE BROKER OR LOAN OFFICER. NOT ALL CLAIMS ARE COMPENSABLE AND A COURT MUST ORDER THE PAYMENT OF A CLAIM FROM THE RECOVERY FUND BEFORE THE DEPARTMENT MAY PAY A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT SUBCHAPTER F OF THE MORTGAGE BROKER LICENSE ACT ON THE DEPARTMENT'S WEB SITE REFERNCED ABOVE.
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