The reverse mortgage for Aspen area seniors is back. This time without all the questions about titles and proceeds and payments and inheritances that made this loan go away in the first place.
“The federal government recently re-did the guidelines for the reverse mortgage making them a lot easier to get and safer to own,” said mortgage expert Dan Auld of American Premier Funding. “This new reverse mortgage (Home Equity Conversion Mortgage) is the best way for Colorado seniors to unlock the equity in their homes.
These are government guaranteed loans and for some, best of all, the loan is not dependent on income or even credit. The entire amount you are eligible for depends on the borrower’s age and the value of the property.”
You can get your money several ways: Lump sum, line of credit, monthly payments, or you could even work it so that you never have to make another mortgage payment for as long as you or your spouse live in the house.
Or some combination of the above.
Alright: Let’s get to the caveats:
1) You have to be at least 62 years old and live in your house.
2) You still have to pay taxes, insurance and upkeep.
3) The house stays in your name.
4) You can never owe more on your loan than your house is worth. If that happens, the federal government makes up the difference.
5) When you go to your great reward, your heirs have one year to sell or refinance.
6) The proceeds are tax free.
7) The loan limit is $625,500.
8) It does not affect Social Security or Medicare eligibility.
“Reverse mortgages for seniors used to be good in theory but not in practice,” said Jan Goldstein of Colorado. “But there were so many restrictions and issues of ownership and inheritance and appraisal that they were just not practical for lots of folks. HUD made these problems go away and that is why the reverse mortgage is the best way to go for us.”