Understanding the Reverse Mortgage and How to Use It to Tap into Home Equity

There are a variety of mortgage products out there that serve the needs of different homeowners, but it can be hard to know what will work best for you. If you happen to be close to retirement and are looking at options that may be more financially beneficial for you, here are the details on a reverse mortgage and how this product can work for you.

The Details On A Reverse Mortgage

The reverse mortgage was created in 2009 as the Home Equity Conversion Mortgage for Purchase (HECM) following the 2008 recession. While this type of mortgage is only available to homeowners who are 62 or older, it offers a way for people to tap into the equity of their home so that they are not required to pay monthly mortgage payments. There are limitations imposed on this product, but this can be useful, as long as all risks and terms of the mortgage are understood.

What’s Required To Apply?

In order to utilize this mortgage product, the homeowner must have paid off their property entirely or have a significant amount of equity in their current home. As people who want to use a reverse mortgage will have to go through a credit check, they will have to be able to prove that they have the ability to pay for all the fees associated with home ownership. This can include common expenses like insurance, property tax and any other applicable charges that come with a monthly mortgage payment.

How You Can Use It

A reverse mortgage can be confusing to understand.  It is intended for those who want to receive monthly payments, get a lump sum payment from their equity or even access a line of credit, or just as a means of tapping into additional funds.  This means that the overall loan balance of the mortgage will increase over time due to interest.  Also, insurance may not be paid consistently.  The reverse mortgage assumes that these expenses will be taken care of once the owner has passed away and the property can be sold or the loan balance is paid by heirs.

A reverse mortgage can be a beneficial product for homeowners nearing retirement, but it’s important to be aware of the associated costs and risks involved to determine if this product is beneficial for you.  For more information, give me a call – J.P. Cook – 602-320-4253.

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18300 N Shimmer Lane Surprise, AZ 85374

$465,000

2 Beds

2 Baths

1,627 SqFt

Status Active

MLS # 6654095

Property Type Single Family Residence

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Desired Madera model with great room floor plan, and heated salt water pool! Lush landscaping backyard provide plenty of privacy when frolicking in the salt water pool. Home has been professionally modified to a large open great room, ideal for a larger table and game area. Inside features plantation shutters throughout, GE profile kitchen appliances, additional kitchen cabinets with built-in desk, a bay window in the primary bedroom, two sinks in primary bath, and inside laundry with utility sink. Garage has built-in and workbench. The pebble-tec pool pool with its attractive water feature is heated and self-cleaning. Your tropical backyard has an extended covered patio with pull-down shades and strategically planted foliage that provide privacy.

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3789 E Yorkshire Circle San Tan Valley, AZ 85140

$465,000

4 Beds

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2,134 SqFt

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MLS # 6658819

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PRICE ADJUSTMENT -This delightful property is nestled on a premium corner lot! Immaculate interior boasts vaulted ceilings, tons of tile flooring, fresh/new carpet in all the right places, graceful archways, & a spacious living/dining room w/French doors to the custom AZ room. The kitchen was update w/newer appliances, recessed lighting, granite counters, & ample white cabinetry w/crown molding. Super island w/a breakfast bar & a breakfast nook is ideal for casual dining. The generously sized AZ Room is bathed in sunlight with ceiling fans, excellent for year-round entertainment. Retreat to the main suite, w/ AZ room access, a full ensuite w/dual sinks, & a walk-in closet. Delightful backyard has artificial turf landscape & looks like a beautiful park!

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3841 Turkey Trail Lakeside, AZ 85929

$465,000

4 Beds

2.5 Baths

2,072 SqFt

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MLS # 6659919

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Welcome to this stunning 4-bedroom, 2.5 bathroom home that seamlessly blends comfort, style, and functionality. With an open concept lies a kitchen, which boasts recent upgrades, providing both modern aesthetics and practicality. Stainless steel appliances, sleek countertops, and ample cabinet space make this kitchen a haven for both aspiring chefs and busy families. The home features a thoughtful layout, with a spacious living room perfect for hosting gatherings and a separate family room that provides a more intimate space for relaxation. The family room opens up possibilities for cozy movie nights or quiet evenings with loved ones. Newly installed heating and cooling systems ensure year-round comfort, allowing you to enjoy every season without compromise. The large windows throughout the home allow natural light to flood in, creating a bright and airy ambiance. Outside, the expansive fenced backyard offers a private retreat. With an RV gate and hook-ups, it's a dream for adventure enthusiasts looking to hit the open road. For those with a penchant for hobbies or extra storage space, the property comes complete with a spacious 3-car garage and 2 additional outbuildings. Whether you're a car enthusiast, DIY enthusiast, or simply need extra space, these structures provide endless possibilities.

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43317 W Wallner Drive Maricopa, AZ 85138

$465,000

5 Beds

3 Baths

3,401 SqFt

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MLS # 6663086

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Your dream home is finally here! You'll LOVE to own this one-of-a-kind two-story residence in Rancho El Dorado! Starting with a 3-car garage, low-care front yard, and stone accents. Be delighted by an inviting interior showcasing a combined living/dining room and a formal family room paired with tile flooring in all the right places. The impeccable kitchen is equipped with recessed lighting, stainless steel appliances, quartz counters, mosaic backsplash, white cabinetry, a peninsula with a breakfast bar, and a breakfast nook. Head upstairs, to discover the HUGE loft offering endless possibilities! The bright main bedroom boasts plush carpet and an ensuite with dual sinks. The expansive backyard provides a covered patio and pavers. A rare find like this will surely impress you!

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