Ruthie Rocks & Teaching Jim Audio Experience: How Many Homes On The Market?

Get Las Vegas Real Estate Market Stats & Reverse Mortgage Truths

Ruthie Rocks and Marketing Max are joined by Ryan and Susan of American Advisors Group. Ryan and Susan explain what reverse mortgages are and the pros of getting a reserve mortgage. There is a lot of misinformation out there about Reserve Mortgages, so Ryan and Susan set the story straight for you.

A reverse mortgage is a loan. A homeowner who is 62 or older and has considerable home equity can borrow against the value of their home and receive funds as a lump sum, fixed monthly payment or line of credit. Unlike a forward mortgage—the type used to buy a home—a reverse mortgage doesn’t require the homeowner to make any loan payments.

Instead, the entire loan balance becomes due and payable when the borrower dies, moves away permanently or sells the home. Federal regulations require lenders to structure the transaction so the loan amount doesn’t exceed the home’s value and the borrower or borrower’s estate won’t be held responsible for paying the difference if the loan balance does become larger than the home’s value. One way this could happen is through a drop in the home’s market value; another is if the borrower lives a long time.

Reverse mortgages can provide much-needed cash for seniors whose net worth is mostly tied up in the value of their home. On the other hand, these loans can be costly and complex, as well as subject to scams.

With a reverse mortgage, instead of the homeowner making payments to the lender, the lender makes payments to the homeowner. The homeowner gets to choose how to receive these payments and only pays interest on the proceeds received. The interest is rolled into the loan balance so the homeowner doesn’t pay anything up front. The homeowner also keeps the title to the home. Over the loan’s life, the homeowner’s debt increases and home equity decreases.

KEY TAKEAWAYS
• A reverse mortgage is a type of loan for seniors ages 62 and older.
• Reverse mortgage loans allow homeowners to convert their home equity into cash income with no monthly mortgage payments.
• Most reverse mortgages are federally insured.
• Reverse mortgages can be a great financial decision for some, but a poor decision for others.
So hear what Ryan and Susan of American Advisors Group have to say and determine if a Reverse Mortgage is right for you.