Reverse Mortgages from EBSB

A reverse mortgage from EBSB is a loan that allows seniors to use the equity they've accumulated in their homes over the years to improve their quality of life and break down the financial barriers to independent living. By converting equity into income, a reverse mortgage is a way for seniors to stay in their home and receive cash to use for any purpose - whether it's day-to-day-living expenses, paying off existing debt, purchasing a second home, or traveling the world. Best of all, they retain the title and remain living in their home.

The opposite of a traditional mortgage…

Unlike a traditional mortgage, where you take out a loan to buy a home and make monthly payments for an extended period of time, a reverse mortgage uses the equity you've built up in your home and allows you to receive monthly payments, a line of credit or even a lump sum or, any combination for the three.

A reverse mortgage is an ideal way for those 62 and older who have a large portion of their wealth built up in the equity of their home and want to access some of it without obtaining a home equity loan or selling the home.

Reverse Mortgage Fast Facts

• There are no monthly payments.
• All borrowers must be 62 years or older.
• There are no income qualifications.
• Maximum loan amount is $362,790.
• The reverse mortgage is safe and secure - HUD protected.
• You own your home - the bank does not.
• No repayment is made until the home is sold or the owner permanently moves out or passes away, at which point, your heirs have choices - they can repay the loan and keep the house or sell the home and repay the loan.
• You will never owe more than the value of your home.
• Any closing costs and fees incurred can be financed as part of the loan.

HUD Protected - Before being approved for a reverse mortgage, borrowers are required to meet with a representative of the department of Housing and Urban Development, which insures the loans.

Uses for a Reverse Mortgage - Funds can be used to pay-off a mortgage, purchase a second home, make home repairs/renovations, finance healthcare, medication, prescription drugs, pay taxes, grandchildren's education, travel, car repairs or new cars, anything you want.

Three important things to understand:

1. Anyone wanting a reverse mortgage backed by HUD, must go through a free loan-counseling program first. HUD backs 90 percent of reverse mortgages. Other lenders often require loan counseling or education programs, as well.
2. When it is time to repay the loan once the property is vacated, usually at death. Heirs can pay the bank off directly and keep the house themselves or sell the property.
3. Up front costs consist of the home appraisal and termite inspection. Other costs that may be rolled into the amount borrowed include loan origination fees, mortgage insurance and closing costs. One of the most important questions is how long the borrowers can reasonably expect to stay in the home. The longer they stay, the less expensive the cost of the loan when it is spread out over time. The older you are and the more your home is worth, the more you can borrow. (Maximum borrowed amount $362,790.)

Getting started
If you want to know how an EBSB Reverse Mortgage will work for you, call our loan specialists at 800-657-3272 or e-mail any questions to Residential Lending