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Tag: Reverse Mortgages

Benefits & Downsides of Reverse Mortgages to Consider in 2022

Whether it’s a reverse mortgage or any other loan, they all have their own advantages and disadvantages. If you are under or over the age of 62 and have no idea about the pros and cons of a reverse mortgage, there is no need to stress. We’ll help you uncover some of the most important benefits and drawbacks that will help you save time and energy. 

Scroll down to learn more about it. 

What is a Reverse Mortgage?


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A reverse mortgage is also referred to as a home equity conversion loan. It’s a home loan that allows elderly homeowners to convert their home equity into profit without selling their property or the land they own. 

What Are the Requirements for a Reverse Mortgage?

A reverse mortgage loan comes with certain terms and conditions. Want to know which ones these are? Continue reading below:

1. The mortgage or the lender must be at least 62 years old to qualify for the reverse mortgage. 

2. To enjoy the benefits of the reverse mortgage, one must have at least 50% of the equity in the property. 

3. The house you plan to live in after retirement should be your primary residence. 

If you succeed in meeting all these requirements, then congratulations – you can easily benefit from the reverse mortgage. 

The Benefits of a Reverse Mortgage

Here are some of the main benefits and drawbacks of reverse mortgages:

  • Senior borrowers over the age of 62 or over are provided with a number of advantages. 
  • It can help you save money for an unexpected medical emergency. 
  • During the period of retirement, the reverse mortgage can provide financial independence and flexibility because the earnings from the loan can be easily used according to the borrower’s wishes. 
  • It can also facilitate an aging person or couple who are planning a house renovation. 
  • The money received from a reverse mortgage is often used by the borrowers to pay for their in-home care demands. 

Disadvantages of a Reverse Mortgage

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  • The costs and fees of a reverse mortgage are fixed. Therefore, it continues to be a major drawback. 
  • The possibility of losing a home through a reverse mortgage is also high. 
  • It’s not free at all. There are several hidden expenses that are linked with it. Plus, you have to manage your taxes, insurance, and HOA fees, along with the payment of upfront insurance premiums. However, it can be roughly 2% of your home’s appraised value. The closing fee is also included and needs to be paid. 
  • It can also affect other retirement program benefits, such as Medicaid or Supplemental Security Income (SSI). 
  • Consulting and seeking help from a specialist is a must before you make any decision that can compromise your benefit eligibility. 
  • If you’re planning to leave your completely paid-off home to your heirs, then a reverse mortgage would not be a good option to consider. 

Where to Learn More About Reverse Mortgages?

Whether it’s you or anyone else planning to consider a reverse mortgage, we suggest you consult with a trusted advisor. We would recommend you consider American Mortgage Resource, Inc. We are well-known for being a trustworthy place where you can get exact information about some of the best loans available in 2022. Call us at (617) 972-8588 to speak to a loan expert.

Private Mortgage Insurance (PMI)

When it comes to a mortgage, considering all of your options is crucial in finding the arrangement that best meets the continued needs of you and your family. Many private insurance companies will offer home buyers PMI, which is a deal typically established by the lender and paid for by the borrower, but can benefit both parties. Continue along with this month’s blog for more information about PMI and to find out if it’s right for you.

The Purpose of PMI

PMI is sometimes required of home buyers who have put down a deposit that’s less than twenty percent of their loans total value or who have taken out a conventional loan rather than a government assisted loan. Essentially PMI is insurance coverage for the lender to ensure they will be repaid the amount of the loan in full.

Pros of Having PMI

Agreeing to PMI can help home buyers who are struggling to qualify for a loan large enough to afford a home. It can also help them qualify for their desired loan much more quickly. As the prices of homes continue to soar every year, a prolonged plan to save for a larger deposit may not be the best option for some potential home buyers.

Cons of Having PMI

The biggest downside of PMI is that it’s an additional monthly expense or upfront cost that new home buyers are responsible for paying in addition to their mortgage. It’s also an expense for a service that doesn’t directly benefit those funding it. PMI will usually have to be paid until the borrower has compensated a predetermined minimum on their principle.


Private mortgage insurance can help countless families finally catch the break they need to afford a home. For more information on how to get approved for a loan, visit this article. For expert help through the loan and mortgage processes, contact our professionals here for guidance you can trust.

Reverse Mortgages 101

The word “mortgage” usually brings to mind years of payments to a financial institution, until the full payment is accomplished. However, not all mortgages operate the same way. Hence, this blogpost welcomes the reader into the world of reverse mortgage.

Has to do with home equity

Also known as home equity conversion loans, reverse mortgages indeed are determined by the value of home equity. Reverse mortgages are available for homeowners 62 and older. To take out a reverse mortgage, a homeowner borrows against his or her home equity—i.e. based on the value of the home. Reverse mortgages are great in that they can allow homeowners to take advantage of a lump sum by borrowing against the equity (which can be a source of immediate income when times are tough or a steady stream of income). Although the homeowner is not required to make monthly mortgage payments, the full repayment is achieved at loan maturity.

A picture of home equity.

When is loan maturity achieved?

Loan maturity can occur when the homeowner sells the title of his or her home or moves out of the home (for example, to move into his or her child’s home). Unless the homeowner repays the mortgage by selling the home—the net amount from which would be used for repaying the mortgage loan—the homeowner’s heir(s) must repay the mortgage. Loan maturity can also occur when the homeowner dies. Creditors have the motivation to not collect monthly payments since the loan balance increases.

An elderly woman dabs.


When one only has the facts above, a reverse mortgage could sound too good to be true. However, paying homeowner’s insurance and property taxes are still requirements for a reverse mortgage. (This is why wise financial planning is crucial for avoiding foreclosure.) Moreover, in certain instances, a widow or a widower can lose a home; therefore, reading the fine print is key for benefiting from a reverse mortgage. Another major caveat is that many scammers target the elderly in exchange for a fake reverse mortgage.

An elderly couple talks to a mortgage lender.


So there you have it. Reverse mortgages can be tricky to navigate, which is why you need a professional on your side. To benefit as much as you can from this “home equity conversion loan,” simply enlist the help of American Mortgage Resource, Inc. today.