Reverse mortgages have been around since the 1980s. Many seniors are now familiar with a reverse mortgage loan. However, what they don’t know is that the 2014 reverse mortgage loan is very different from previous reverse mortgages.

The New Reverse Mortgage is the result of the reverse mortgage industry’s top lenders coming together at the Extreme Summit last May. There were an astounding number of product changes particularly in the last two years that have made the reverse mortgage loan a smarter, safer refinance option for seniors. As a participating lender, One Reverse Mortgage hopes that the new reverse mortgage will help even more seniors take advantage of these resources to improve their lives.

What makes the new reverse mortgage different?

There are three main reasons why the new reverse mortgage is new:

Fees may not be as high as you think

The new reverse mortgage is a loan. Due to the low interest rate and fee options that many of today’s reverse mortgage lenders offer, the new reverse mortgage may cost the same as a conventional home loan. Although rates may vary by lender, One Reverse Mortgage ensures that clients receive the best customer service in the industry at an unbeatable price.

Equity is secured

Improvements in loan limit protections and mandatory mortgage insurance make the new reverse mortgage a safer program. The new reverse mortgage is a non-recourse loan. This means that the Federal Housing Administration (FHA) is responsible for absorbing the remaining balance of the loan if the sale of your home does not cover the loan balance. Reverse mortgage loans become due when the last remaining borrower leaves the home. Because today’s reverse mortgages are insured by the FHA, borrowers are guaranteed to have the FHA cover the difference of the loan so that you nor your heirs will ever owe more than the home is worth, regardless of the loan balance.

Your heirs are protected

A common misconception of reverse mortgages is that your heirs will be responsible for the repayment of the loan. This is simply not the case. Once the last borrower leaves the home, the loan will become due. At this point, your heirs have the choice to sell the home and keep any proceeds exceeding the amount of the loan, or choose to keep the home and refinance the existing mortgage balance.

Why a reverse mortgage?

The new reverse mortgage boasts a number of advantages that make it the ideal refinance tool for anyone who wants to make the most out of their retirement planning or simply anyone who wants to improve their life. A reverse mortgage reduces stress by paying off the borrower’s existing mortgage and eliminating monthly payments.* A reverse mortgage maintains your independence by keeping you on title with complete ownership of your home**. A reverse mortgage is a refinance option that provides borrowers with a loan in the form of tax-free*** money. A reverse mortgage ultimately provides a better lifestyle for you and your family by allowing borrowers to delay Social Security benefits**** which will ultimately mean receiving more money when you do tap into this trust fund.

The National Reverse Mortgage Lenders Association (NRMLA) offers a brochure that will provide you with basic information on the reverse mortgage program. One Reverse Mortgage offers an informational guide and DVD that will provide detailed and customized information on the reverse mortgage program that will describe how a reverse mortgage can meet your retirement needs.

*Homeowner is still responsible for taxes, insurance and property maintenance.
**You remain responsible for counseling costs, taxes, insurance, and maintenance expenses.
***Please consult with your financial advisor.
****May affect SSI or Medicaid. Please consult with your financial advisor.