Reverse Mortgages

Could a Reverse Mortgage
be a Good Fit for Your
Retirement Needs?

Reverse Mortgages

Buy or Refinance Your Home for Retirement

Asheville Team Spotlight

Paul Donohue

62+ Reverse Mortgage, Retirement Specialist
NMLS # 68305

National Mortgage expert and local Asheville team member, Paul Donohue specializes in reverse mortgages. Paul’s true passion is sitting down with people age 62+ to sort out whether a reverse mortgage, is a fit for their financial needs. Read more about Paul here

From the Learning Center

Featured Video

Paul Donohue’s take on tackling one of retirement’s biggest questions: Should you pay cash for your retirement home? At a minimum, Paul argues that those over 62 should make themselves aware of how a reverse mortgage can preserve cash, mitigate Sequence of Returns Risk and help extend the life of your portfolio investments.

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Key Benefits of Reverse Mortgages

Eliminate Required Mortgage Payments

A Reverse Mortgage is the only home loan that doesn’t require a monthly payment. Of course, the homeowner must pay taxes and insurance, and the balance is due once the last remaining borrower leaves the home. More than 40% of people age 62+ still make a house payment…a reverse mortgage eliminates the payment, and improves cash flow.

Purchase Your Retirement Home

The HECM for Purchase (H4P), is a type of reverse mortgage used to buy your dream retirement home, without the required monthly payments…you are always responsible for general maintenance, taxes and insurance. The reverse mortgage allows you to buy the home you really want and need, for the many good years ahead of you!

Provide Cash, Tax-Free From Your Home

A Home Equity Conversion Mortgage(HECM), is a reverse mortgage that converts your home equity into cash, which can be used at any time for any purpose, tax free. This safe, FHA insured government loan allows people 62+, to turn housing wealth into cash, while living in the home.

Build a Growing Line of Credit

A Reverse Mortgage Line Of Credit(LOC), is guaranteed to grow, and over time can amass a sizable cash nest egg. The LOC can be used for long term care needs or other major expenses in your elder years, at a time when you’ll need it most. The closer to age 62 you set up the reverse mortgage credit line, the more time it has to grow for you.

Your Minute in Reverse Videos

Basics of Reverse Mortgages (aka HECMs)

What The Heck’s a HECM? Pronounced Heck-Em, a Home Equity Conversion Mortgage is a type of Reverse Mortgage that is insured through the Federal Housing Administration (FHA) and is used to covert your home’s equity into tax-free cash, without...

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Retire in the Home You Love

Recent research found that 93% of people 65 and older want to stay in their own home, for the duration of their retirement years.It’s understandable that you would want to retire in the home you love, in the safety of the community you...

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Cash is King

Cash Is King.The Biggest challenge in retirement is…to not outlive your money. To succeed in retirement, Cash is King.Income planning, requires thoughtful allocation of your cash assets. The big fear of running out of cash in your later years is an issue...

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Rightsizing for Retirement

One big myth about housing for Baby Boomers is that everyone wants to downsize in retirement…not true. According to research published by Merrill Lynch, 19% of retirees move into a similar sized home and 30% upsize to accommodate family, entertain friends...

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Your Minute in Reverse Blog Posts

Age Wave

Age Wave

As a nation, we face unprecedented retirement challenges that will stress our health and social systems. The loss of pensions, 17 years of stagnant wages, low returns on personal savings, and because we are now living 20, 30 even 40 years in retirement, we...

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Reverse Mortgage Videos

Paul Donohue addresses two common challenges of buying for retirement, in the Asheville Market; Affordability and Limited Inventory. Paul talks about “sticker shock”, and how a Reverse Mortgage expands retirement buying power, to help Realtors put buyers into their dream retirement home.

Paul Donohue, Director of Reverse Mortgages at Fairway Independent Mortgage – The Asheville Team, interviews Wade D. Pfau, Ph.D., CFA, Professor of Retirement Income in the new Ph.D. program for Financial and Retirement Planning at The American College in Bryn Mawr, PA.

Paul Donohue’s take on tackling one of retirement’s biggest questions: Should you pay cash for your retirement home? At a minimum, Paul argues that those over 62 should make themselves aware of how a reverse mortgage can preserve cash, mitigate Sequence of Returns Risk and help extend the life of your portfolio investments.

FAQs on Reverse Mortgages

Does the Lender Take the House When We Die?

No. You own the home and retain title to the property. You can live in the home as long as you want to, or decide to sell it anytime you want.
As with a traditional or “forward mortgage”, with a Reverse Mortgage the lender has a lien on the property and the balance of the loan will be required to be paid.

When is the Loan Balance Required to be Paid Off?

As long as you maintain “qualified”, the loan balance does not become due until the last remaining borrower leaves the home permanently. This generally means when they have vacated the home for one year, or has knowledge they will not be returning to the home.
At this time the lender will begin notification that the loan balance is due and payable, and will inquiry as to the estates plans to settle the balance. On a case by case basis, the lender will allow up to one year for the estate to pay the balance in full.

What Does it Take to Qualify for a Reverse Mortgage?

There are seven eligibility factors that will be considered when qualifying for a revere mortgage, they are;

  • At least one Borrower must be 62 years or better
  • Property must be a single family home, a 2-4 unit dwelling, or a FHA-approved condo
  • Must live in the home as the primary residence(live there 6+ months per year) and have significant equity, as determined by the age of the youngest borrower
  • Minimal property and credit qualifications(credit scores are not considered)
  • Can not be delinquent on any Federal debt
  • Must pay property taxes timely and maintain homeowners insurance coverage
  • Must complete HUD approved, reverse mortgage counseling
Will There be an Inheritance Left for My Heirs?

Whatever assets remain in your estate upon your passing may be willed to your heirs. Once the loan balance is paid in full, all remaining home equity will go to your heirs.
The home can be sold with the proceeds paying the loan balance, or a family member can choose to settle the loan balance and keep the home.

What Does the Lender Require of Me to be Qualified?

You must occupy the property as your primary residence and maintain it in reasonably good condition. You also must pay your property taxes, home owners association dues when required, and maintain homeowners insurance coverage.

What Are the Key Benefits of a Reverse Mortgage?

There is an enormous list of benefits that can be custom tailored to your personal goals and income planning needs for retirement, such as;
• By Refinancing your current mortgage, you will eliminate a required monthly payment, and free up cash flow, of course you must continue paying taxes and insurance,
• You can purchase a new home, more suited to your changing needs in retirement with a 30 to 70% down payment, as determined by the age of the youngest borrower,
• Receive tax free cash from the equity in your home, without a required payment,
• Because the loan is FHA insured, you can never owe more on the home than the home is worth,
• Generally will not affect Social Security and Medicare
• Build a growing line of credit, with access to unused funds at any time for any purpose, that is guaranteed to grow and can never be frozen,
• When used in a coordinated strategy, may extend and protect other portfolio assets,
• Can supplement or eliminate the need for a cash reserve bucket,
• Mitigates sequences of returns risk, and increases household income,
• You keep ownership and can live in the home until the end of your retirement,
• It is a safe and secure FHA government insured loan .

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The Asheville Team
149 S Lexington Ave
Asheville, NC 28801
FIMC #2289