reverse mortgage image webConsumer Trust Mortgage wants you to know at least six important facts about Reverse Mortgages. Since 1995, Consumer Trust Mortgage has been helping residents in the Lehigh Valley and beyond to purchase and/or refinance their homes. Now, we are helping people 62 years of age and older to continue to enjoy their homes without the financial burdens of a mortgage payment.

Here are some answers to questions other seniors have found valuable. Of course you will have questions of your own. Please feel free to call Consumer Trust at 610-398-9500 to see how you may be able to benefit from an association with our company.

1. What is a reverse mortgage?
A reverse mortgage is a special type of home loan that lets you convert a portion of your equity in your home to cash. The equity that you have built up over years may be paid back to you. However, unlike a traditional home equity loan or second mortgage a HECM (Home Equity Conversion Mortgage) does not have to be repaid until you no longer use the home as your principal residence or fail to meet the obligations of the mortgage.

2. Can I qualify for a reverse mortgage?
To be eligible for a reverse mortgage you must be a homeowner 62 years of age or older. You must also own your home outright or have a low mortgage balance that can be paid off at closing with proceeds from the reverse mortgage. Additionally, you need to document that you have the financial resources to pay ongoing property charges including taxes and insurance (and of course you must live in your home). The first step is to call Consumer Trust Mortgage at: 610-398-9500 so we may arrange for you to receive low cost, consumer information from a HECM counselor prior to obtaining the loan.

3. What types of homes are eligible?
Your home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.

4. What are the differences between a reverse mortgage and a home equity loan?
With a second mortgage or a home equity line of credit you must make monthly payments on the outstanding loan balance. A reverse mortgage is different because it pays YOU – there are no monthly principal and interest payments. With a reverse mortgage you are required to still pay real estate taxes, utilities, homeowners insurance, and flood insurance (if applicable).
5. Will we have an estate that we may leave to our heirs?
When the home is sold or you no longer use it as your primary residence the cash, interest, and other HECM finance charges must be repaid. All proceeds beyond the amount owed belong to your spouse or estate. This means any remaining equity can be transferred to your heirs. No mortgage debt is passed along to your estate or your heirs. *

6. How much money can I obtain from a reverse mortgage?
The amount varies by borrower and depends on:
Age of the youngest borrower or eligible non-borrowing spouse
Current interest rate
Lesser of appraised value or the HECM mortgage limit established by the FHA
If there is more than one borrower and no eligible non-borrowing spouse the age of the youngest borrower is used to determine the amount you may borrow.

You owe it to yourself to become more educated on this topic, as a reverse mortgage originated by Consumer Trust Mortgage can unlock the key to your financial freedom.

Don’t sell your home, live in it! Call today to 610 398 9500 to make an appointment. We are located in the Lehigh Valley! Our local office is located at 2895 Hamilton Blvd, Suite 103, Allentown, PA 18104.

*Consumer Trust Mortgage Corp. is not a law or CPA firm and should not be considered a legal or tax expert. Although we are mortgage professionals, should you have estate, legal or tax questions we would be happy to discuss these questions with your professional legal or tax advisors.

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