Seniors who meet the following conditions are eligible to apply for a reverse mortgage:
- Have sufficient home equity
- Live in a single family residence, HUD approved condo, or one unit of a 2-4 unit property
- Occupy the property as their principal residence
- Are not delinquent on any federal debt
- Have financial resources to continue to make timely payment of ongoing property charges such as property taxes, insurance and Homeowner Association fees, etc.
- Participate in a consumer information session given by a HUD-approved HECM counselor
Real Estate Agents: Reverse mortgages can be used to purchase a new home. In many areas of California it is common to have a disproportionate amount of net worth locked up in home equity. A reverse mortgage can free up some of this equity to remain in an existing home or to downsize with the purchase of a new home, meeting the goal of retaining the independence that comes with home ownership. Anchor Funding RMC can work with realtors in structuring a reverse mortgage new home purchase.
Financial Planners and Investment Advisors: Professionals who are actively involved in helping seniors preserve their assets are now employing reverse mortgages as an important tool. Another real life example, Mr. Smith (name changed) was referred to Anchor Funding by a financial advisor. Mr. Smith was running out of money. His monthly living expenses were about $3,000 short of his monthly income. His remaining cash, $45,000 was going to be completing depleted in 18 months. A reverse mortgage allowed him to pay off his existing mortgage and have access to a credit line from which he could withdraw sufficient funds each month to cover the shortfall. The credit line would give Mr. Smith sufficient reserves to stay in the home another 10 years without having to access his last $45,000. In summary, financial professionals sometimes recommend reverse mortgages to allow their clients to retain, rather than spend down their financial reserves.
Estate Planners and CPAs: Selling an expensive home, if there are significant capital gains, can trigger a large tax bill. If a senior(s) prefer to remain in their homes, these professionals can advise on the use of reverse mortgages to age in place while avoiding potential capital gains taxes on the sale of a property.
Adult Children of the Reverse Mortgage Candidate: Often it is the adult children who look for ways to help make a better life for their parents or help relieve their parents' financial strain. In these situations the entire family may seek education and counsel on reverse mortgages.
In summary, senior homeowners are our clients. So too are a wide range of supporting family members and professional advisors who may be involved in deciding whether a reverse mortgage is an appropriate tool for improving a senior's financial situation and quality of life.