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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20665 W Briarwood Drive Buckeye, AZ 85396

$487,000

3 Beds

2 Baths

1,623 SqFt

Status Active

MLS # 6691653

Property Type Single Family Residence

Price Type --

This beautiful Verrado home is tastefully upgraded throughout beginning at the tiled front porch right through to the low maintenance backyard with extended covered patio where you can catch a glimpse of those magical AZ sunsets. Wallpaper, chandeliers, upgraded sinks, window enhancements, triple sliding patio doors, flooring, garage overhead storage racks, solar and more.

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17604 E Stacey Road Queen Creek, AZ 85142

$487,000

2 Beds

1.5 Baths

896 SqFt

Status Active

MLS # 6689185

Property Type Single Family Residence

Price Type --

With outstanding views of the San Tan Mountains from your extended front porch, this is the perfect little home in the desert! The flawlessly laid out, open concept floorplan maximizes the square footage. This home boasts 2 bedrooms and 1.5 baths. Master bath has an upgraded tile surround. Kitchen has been upgraded with tile backsplash, extended cabinets, and a large pantry. French doors in the master bedroom open to a covered patio, perfect for your morning coffee. The oversized garage can hold all your toys and there is additional storage space in the attic. The front-loading washer and dryer are located in the laundry nook within the garage and have additional storage cabinets. The large covered back porch and desert landscaped backyard is perfect for entertaining and is big enough for for a pool. This home is 2 years old and has been perfectly maintained. Washer/Dryer/Refrigerator Convey. With no HOA, this is the perfect starter/retirement home.

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20032 W Exeter Boulevard Buckeye, AZ 85396

$486,995

4 Beds

2 Baths

2,270 SqFt

Status Active

MLS # 6663801

Property Type Single Family Residence

Price Type --

The ranch-style Augusta offers thoughtfully designed living space . The foyer leads to an open floor plan with a Gourmet kitchen, a great room, that has center meet doors to covered patio. This home offers a split floor plan with 2 bedrooms and a full bath and another bedroom in center of home next to the convenient laundry room. The Lavish Primary Suite is on the other end of the home, with a beautiful bathroom and walk in closet. Home is complete with soft water loop and tankless water heater! A must see!!

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17979 W Avenida Del Sol -- Surprise, AZ 85387

$486,995

4 Beds

3 Baths

2,611 SqFt

Status Active

MLS # 6694724

Property Type Single Family Residence

Price Type --

Come see this incredible floorplan, MOVE IN READY! An amazing layout with 4 bedrooms, 3 baths w/study. In addition to being energy efficient and a Smart Home, the many upgrades make this one stand out. Great curb appeal, partial view fence, good size yard great for entertaining. Two-tone paint, 9' ceilings. Nice Flagstone cabinets, Quartz kitchen and baths, island, and walk in pantry. Lots of room to cook and move around!

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5509 N 194th Avenue Litchfield Park, AZ 85340

$486,990

3 Beds

2 Baths

1,630 SqFt

Status Active

MLS # 6693780

Property Type Single Family Residence

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Brand new open-concept, well designed home has the perfect amount of space to in all the right places. This single level home offers 3 bedrooms, open study, 2 bathrooms, and 2 car garage with private yard and room for a pool! The owner's suite has an impressive walk-in shower with custom tile surrounds and very large closet with lots of shelving for storage. You'll be dazzled by the gourmet kitchen and stainless-steel appliances with gas cooktop in your gourmet kitchen, upgraded cabinets and countertops with custom backsplash, upgraded flooring throughout are just some of the custom choices that make this home a must see. 2X6 construction and extensive new home warranty.

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15626 W Kendall Street Goodyear, AZ 85338

New

$486,990

5 Beds

3 Baths

2,685 SqFt

Status Active

MLS # 6695660

Property Type Single Family Residence

Price Type --

Below Market Financing Available!!!!!!!!!! A two-story home, this space features an open design on the first floor that combines the dining room, Great Room and kitchen as an ideal entertainment area. An attached patio is perfect for outdoor experiences, while a separate bedroom is great for guests. Upstairs is an owner's suite with two walk-in closets, along with three additional bedrooms. Photos are renderings of a model home, not the actual home.

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5612 W Moody Trail Laveen, AZ 85339

$486,990

4 Beds

2.5 Baths

2,338 SqFt

Status Active

MLS # 6679556

Property Type Single Family Residence

Price Type --

Beautiful Brand New Home in a Highly Desirable Central Location - Featuring countless upgrades such as 9' ceilings, Shaw - Milan - Surf 17x17 Tile, Granite countertops in the kitchen. Whirlpool Stainless steel appliances. White cabinets. Energy-efficient features throughout, Programmable thermostat, gas heater, gas range. Spacious walk-in closet in owners suite. Front yard landscaping, covered patio in the backyard. Spectacular Mountain Views! Minutes from downtown Phoenix in a master-planned community featuring walking trails, greenbelts, neighborhood parks and playgrounds. Conveniently located off the Loop 202 and near schools, shopping and dining!

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16080 W El Cortez Place Surprise, AZ 85387

$486,490

4 Beds

3 Baths

2,342 SqFt

Status Active

MLS # 6602025

Property Type Single Family Residence

Price Type --

Brand new, energy-efficient home available NOW! A unique single-story home featuring a social living area. Umber cabinets with white/grey granite countertops and multi-tone carpet in our Elemental package. Paloma Creek is now pre-selling in Surprise. Residents will enjoy floorplans that feature flex spaces, 5 bedroom layouts and covered back patios. There's fun for the whole family at the community clubhouse, pool, outdoor kitchen, and fitness center. Each energy-efficient home comes standard with features that allow your whole family to live better and breathe easier too.* Visit Paloma Creek today. Each of our homes is built with innovative, energy-efficient features designed to help you enjoy more savings, better health, real comfort and peace of mind.

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2711 N 38th Street Phoenix, AZ 85008

$486,000

3 Beds

2 Baths

1,237 SqFt

Status Active

MLS # 6666072

Property Type Single Family Residence

Price Type --

Home in the center of everything! Just minutes from Tempe, Sky Harbor, and Downtown! Upgraded Gorgeous Arcadia-Lite Home! Home is open floor plan and perfect for entertaining. Stained concrete floors throughout. Massive, but cozy Back Patio. Huge back yard. RV gate. Appliances Convey. Walking distance to great restaurants, shopping, transportation, and close to freeways! Stylish master retreat boasts contrast accent wall, large closet, & private en suite w/barn door entry. Designer tile, fixtures, & vanity. Roof and AC under 4 years old. Rates are no issue as we have a Large Seller and/or lender concession available!

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2321 E Millbrae Court Gilbert, AZ 85234

Open House

$486,000

3 Beds

2 Baths

1,486 SqFt

Status Active

MLS # 6687346

Property Type Single Family Residence

Price Type --

Welcome to this charming property featuring a cozy fireplace, creating a warm and inviting atmosphere. The natural color palette throughout the home adds a sense of tranquility and easy living. With additional rooms for flexible living space, you have endless possibilities to customize to your needs. The primary bathroom boasts a separate tub and shower, double sinks, and good under sink storage. Step outside to enjoy the fenced backyard with a covered sitting area, perfect for relaxing or entertaining. Fresh interior paint and new flooring throughout the home provide a modern touch. Don't miss the opportunity to make this your dream home!

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3319 W Verde River Road San Tan Valley, AZ 85144

$485,990

3 Beds

2 Baths

1,784 SqFt

Status Active

MLS # 6678861

Property Type Single Family Residence

Price Type --

Popular Arroyo floor plan featuring 3 bedrooms plus open study/den. , Beautiful kitchen with upgraded cabinets, granite countertops, plank tile flooring, upgraded lighting and plumbing fixtures, and much more. Our Master Planned community boasts a 7400 square foot community pool, 6 spacious parks, 3 basketball courts, sand volleyball, pickle, ball, bocce ball and corn hole. This community is an ideal location near the base of the San Tan Mountains and close to all the best shopping has to offer.

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3651 S 97th Avenue Tolleson, AZ 85353

$485,990

5 Beds

5 Baths

3,131 SqFt

Status Active

MLS # 6692180

Property Type Single Family Residence

Price Type --

Beautiful Brand New Home in a Highly Desirable West valley location. Features countless upgrades such as 9' ceilings, Shaw 17x17 Tile, Granite countertops in the kitchen. Whirlpool Stainless steel appliances. White shaker cabinets with Stainless Steel Pulls. Energy-efficient features throughout, WIFI & programmable thermostat. Spacious walk-in closet in the primary suite. Front yard landscaping, covered patio in the backyard. Spectacular Mountain Views! The community features a greenbelt, a premium neighborhood park with playground. Conveniently located near the new 202 freeway, schools, shopping and dining, and Estrella Mountain Regional Park.

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