Section 3: Reverse Mortgage Loan Benefits

Reverse Mortgage Loan Benefits

A reverse mortgage is self-explanatory in that it does the opposite of a traditional mortgage loan: Instead of borrowing money to buy a house, you can use the equity in your home to secure a loan. In other words, a reverse mortgage can be viewed as one or more advance payments on your home equity. A reverse mortgage is primarily designed for retirement-age people who are looking to access funds to cover living expenses but don't want to sell their home to get it. The money you receive is generally considered tax-free, and you don't have to pay any of it back as long as you remain in the home and pay property taxes, homeowners insurance and overall maintenance of the home. When you ultimately sell the home, move out or you (and in some circumstances your spouse) die, the loan must be repaid, either by you, your spouse or your estate. If the loan comes due at you or your spouse's death, your heirs may need to sell the home to pay off what your estate owes. Reverse mortgages typically come with several costs, including a mortgage insurance premium, origination fee, servicing fee and third-party fees. Also, interest will accrue over the life of the loan.

Jumbo Loan Benefits

1. Help Solve Financial Problems

It can help solve financial problems. Even if you don't have a mortgage payment, retirement can be expensive. Average health care expenses alone for a retired couple amount to $285,000, according to Fidelity Investments, and that's not including long-term care. Through a lump-sum payment or ongoing monthly payments, a reverse mortgage. can provide retired homeowners with some extra cash flow to help stay afloat financially. You can't afford a monthly payment. Another way to gain access to your home's equity is through a home equity loan or line of credit. If you need cash but can't afford a monthly payment, however, those may not be good options.

2. No More mortgage

A reverse mortgage won't require you to make monthly payments on the debt you've incurred. You will, however, still be required to pay your property taxes, your homeowners insurance premiums and any other ongoing expense the lender requires.

3. Down Payment

There is no down payment necessary for an reverse mortgage. With a regular reverse mortgage, the loan amount is based on the equity in the home. With a reverse purchase, there is no equity, as the home has not been purchased, but there must be equity to cover accrued interest.

4. Private Mortgage Insurance (PMI)

Do all reverse mortgage loans require mortgage insurance? No. The HECM reverse mortgage program has mortgage insurance premiums, but there are non-FHA programs available in the market for certain scenarios and those programs do not have mortgage insurance.

 5. Credit Report

There are no credit requirements for Reverse mortgages

6. Lifetime Benefit

Reverse mortgage loans get you into one of the best loans which you will be able to use and benefit from for the rest of your life. 

7. Prepayment Penalties

You will not have a prepayment penalty when you work Orbit Home Loans. This is not the case with all lenders so make sure to check. 

Common Questions on Conventional Loans

- Are Conventional loans better?

Everyone has unique needs for their buying situation. Although Reverse mortgage loans are very competitive, they are not always the best choice for the consumer. Because of that we recommend you talk to your loan professional for your specific needs.

- Are there any benefits to sellers?

Reverse Mortgage l loan buyers have the lease restrictions when it comes to buying and is typically a sought-after product when looking at offers.

- What are Orbit Realty’s and Orbit Home loans benefits?

With Orbit Realty you and Orbit home loans you get the benefit of working with a team that is highly trained and qualified. Okay, maybe every company says they have that, but the truth is that only 10% of companies nation-wide have both a real estate and mortgage company combined and because of that we are able to be one of the most competitive lenders on the market. We are also able to pass savings onto you buy not having to change additional fees that you often see with other lenders. 

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