Las Vegas Reverse Mortgage
What exactly IS a Las Vegas Reverse Mortgage?
A reverse mortgage is a loan that enables homeowners who are 62 years of age or older to access the equity in their homes as tax free income without having to sell the home, give up title or take on a new monthly mortgage payment.
With a regular mortgage, money is borrowed to purchase the home and payments are made. The difference between what you borrowed and the market value of the property is your equity. As time goes on, the payments reduce the amount borrowed and hence, the equity enlarges. A bonus is also the appreciation in value of the property over time which also contributes to your equity stake.
A reverse mortgage works in the opposite direction. You use the equity in your home to receive cash, either as a lump sum, a line of credit, monthly amounts, or a combination of all three. As time rolls on, the payments to you increase the loan amount and your equity in the home decreases
How do I qualify for a Reverse Mortgage?
- You must be 62 years of age or older and have equity in your Las Vegas Home.
How is my benefit amount calculated?
- The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.
What properties qualify for Reverse Mortgages?
- Most property types are eligible for reverse mortgages. These would include Single Family Homes, qualified condominiums, townhouses, manufactured homes and 1 to 4 family owner occupied residences are eligible.
How do I get my money?
You have three options on how to receive your funds.
- Monthly Payments (made to you)
- Lump Sum Cash to you
- Line of Credit – unscheduled payments or in installments, at times and in amounts of borrower’s choosing until the line of credit is exhausted.
What are the Benefits of a Reverse Mortgage?
- Funds from a reverse mortgage are tax free and do not effect your eligibility for regular social security and Medicare.
- Reverse mortgages allow you to access the equity in your home while allowing you to stay in the home.
- No monthly obligation of a mortgage payment.
A Reverse Mortgage borrower cannot be forced out of his/her home. Nor will he ever owe more than the value of his house. Reverse Mortgages are “non-recourse” loans, meaning in the rare case of drastic declines in home prices, the homeowner can never be held liable beyond the value of the subject home.
Requirements of maintaining a Reverse Mortgage
You continue to be responsible for payment of property taxes, hazard insurance and the proper upkeep of the home. Any breach of these obligations renders the outstanding loan due and payable.
Similarly, any absence from the home of the last surviving borrower for more than twelve consecutive months terminates the agreement. Selling or renting out all or part of the home or having liens attached to the home for whatever reason also means that all bets are off and the transaction ends.
What happens when I die?
At the time of your passing, the reverse mortgage comes due and payable in full. At that time, your heirs have two options. First, they can payoff the balance and keep the home. Second, they can sell the home and they would receive any proceeds above the reverse mortgage balance.
If you are interested in receiving more information about a reverse mortgage or would like to speak to someone about a reverse mortgage, please call us at 702.376.0088.
About the Author
Tony Sena is broker/owner of Shelter Realty in Las Vegas Nevada. For more than a decade Tony and his partners have provided residential real estate and property management services to sellers, buyers, investors, and property owners in the Las Vegas Valley. A Las Vegas native and former police officer for the City of Henderson, Tony brings to the table a unique local perspective that continues to serve his clients well.