Reverse Mortgage

 

What is a reverse mortgage?

A reverse mortgage, also called a Home Equity Conversion Mortgage (HECM), is a loan that uses your home as collateral, but instead of making payments to a lender, the lender pays you. As long as you live in the home and comply with the loan terms, including payment of taxes and insurance, you will never have to make a mortgage payment. In other words, you will have no personal liability for the payment of the debt. Upon the sale or transfer of ownership of the property, the loan will then be repaid.
 

How does a reverse mortgage work?

The lender pays out of the loan in three ways: lump sum, monthly payments or line of credit. As long as you have money to access, you can change your mind on how you take the money any time. This allows the homeowner to be flexible with the money.

  • The funds loaned to you are tax-free (consult your tax advisor for your specific situation)
  • Your loan does not affect your Social Security or Medicare benefits
  • You and your heirs will keep any remaining equity
  • You can never owe more than the value of your home
  • There are no application fees
  • You may continue to own your home in your name or in your trust; however, there will be a lien placed on the property by the lender.

The loan is subject to foreclosure for failure to pay property taxes and insurance, to maintain the property and to comply with the loan terms.​

 

Does Schools Financial Credit Union offer reverse mortgages?

The Credit Union has partnered with a firm that specializes in reverse mortgages, Alliance Reverse Mortgage, to offer this service to our members. Members have asked us about reverse mortgages, and in researching companies with this specialty and talking to other credit unions, Alliance stood out as having an excellent reputation for both integrity and service.

Alliance reverse mortgage