Exploring reverse mortgages for Hot Springs Village residents and new home buyers
Over the last several years, long-term Hot Springs Village homeowners have seen the value of their homes grow, and many are looking to optimize home equity. On the other hand, buyers looking to upgrade or relocate are often concerned about the higher interest rates, rising prices, and maximizing available dollars in retirement. A reverse mortgage may be the answer to these concerns.
The history of reverse mortgages dates back several decades, with the initial concept emerging in the 1960s. Financial experts began to see the need for a mechanism allowing older homeowners to access the equity in their homes. The first federal programs were introduced in 1989 and, over time, have gained in popularity. As more and more financial institutions started offering reverse mortgage products, legislation was passed to improve consumer protection and set guidelines.
According to the Consumer Financial Protection Bureau (CFPB), an official website of the US Government, there are various types of reverse mortgage loans: FHA-insured, proprietary reverse mortgage loans that are not FHA-insured, and single-purpose reverse mortgage loans. Home Equity Conversion Mortgage (HECM) is the most common.
Qualifications may vary, but the basics are as follows: you or your spouse must be at least 62. It must be your primary residence. You must have sufficient equity and remain responsible for the home’s taxes, insurance, POA fees, and upkeep. Unlike a traditional mortgage, you do not make monthly payments; the loan balance grows over time as interest accrues. The amount that can be borrowed is based on the age of the youngest borrower, home value, interest rates, and the type of loan program chosen. The loan is repaid when the homeowner sells the home, permanently moves out, passes away, or otherwise defaults. There are various repayment options if the homeowner or their heirs wish to keep the home.
The ‘Pete’ family, Hot Springs Village residents, purchased a home using a new reverse mortgage for purchase. They said even though the approval process was challenging and, at times, frustrating, overall, they are very happy with their decision. Using this vehicle, they could purchase their dream home, and now, in retirement, instead of having savings tied up in their home, they have extra cash to travel, make home improvements, and upgrade landscaping. They are living their best lives in Hot Springs Village!
If you want more information about this type of loan, contact your preferred lending institution or a financial or estate planner for details and qualifications.
Janae Cook Richards
Janae Cook Richards is an award-winning Real Estate Agent in Hot Springs Village and would be happy to answer any questions that you may have.
Janae Cook
AR Realtor
Taylor Realty Group HSV
501-617-9747
