A Leader in Reverse Mortgage Education

The Retirement Strategies Division at Finance of America Reverse (FAR) is an official provider of reverse mortgage education to the Financial Planning Association (FPA). We give you all the tools needed to help clients strategically leverage housing wealth as part of a comprehensive retirement plan.

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Reverse in Action

Improve Cash Flow

Joyce and Jim refinanced their existing mortgage with a new reverse mortgage and eliminated their current mortgage payment.

 

Age: 71 and 72

Home Value: $2,800,000

Potential Loan Amount: $1,528,000

Paid Off Mortgage Balance: ($1,100,000)

Remaining Cash Available: $414,800

Current Monthly Mortgage Payment: $6,808

Monthly Cash Flow Improvement: $6,608

Purchasing a Second Home

Linda and Steve live in Oregon and have $250,000 remaining on their mortgage. They would like to purchase a second home in Texas to be closer to family without selling their current one. They have $3,000,000 in investment accounts but would rather avoid selling and paying capital gains.

 

Age: 64 and 65

Home Value: $1,200,000

Potential Loan Amount: $592,000

Paid Off Mortgage Balance: ($250,000)

Remaining Cash Available: $336,800

Long Term Care

Emily does not have a long-term care solution and is looking to purchase life insurance with an LTC rider, but the premium is $9,000/year. As an alternative, Emily decides to put a reverse mortgage line of credit on her home to self-fund her needs and avoid a high insurance premium.

 

Age: 62

Home Value: $450,000

Paid Off Mortgage Balance: $0

Potential Line of Credit: $220,300

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Frequently Asked Questions

Below are some frequently asked questions to help clients better understand the option of a reverse mortgage:

Does the borrower still own their home?

Yes. The borrower still retains ownership of the home and may sell it at any time with no prepayment penalties. The home is simply secured with a lien similar to a traditional mortgage or home equity line of credit.

Are there any required payments?

There is never a required principal or interest payment during the life of a reverse mortgage loan. Homeowners are still required to pay property-related expenses, including taxes, insurance, and HOA fees.

When is the loan due?

Generally, the loan balance is due after the last borrower permanently moves from the home or passes away.

What happens if the borrower’s spouse goes into a nursing home?

The terms of the loan remain the same as long as one borrower remains in the home.

Are reverse mortgages non-recourse?

Yes, reverse mortgages are non-recourse loans, which means the lender can only look to the subject property for satisfaction of the mortgage lien. The borrower and/or heirs are never personally liable for satisfaction of the reverse mortgage.

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