Reverse mortgages are a great product for those over 55, particularly those who have significant equity in their home, but are still carrying a mortgage and carrying costs put a strain on your cash flow. They also allow the senior home owner to access some of their equity to pay off mortgage, credit card and other personal debt, take that long planned trip to exotic places, and continue to live in their home with no mortgage payments . The homeowner does remain responsible for taxes, utilities , insurance, and maintenance. There are no mortgage payments until you decide to move, sell, or death. If two homeowners on the mortgage, the survivor can remain in the home.
The amount you can access depends on age of homeowner(s) and is based on the age of the youngest homeowner. While you will see advertisements for 55% of your home value, that is not likely unless both parties are in their upper 70s at least. A recent mortgage I arranged for a client was for a loan value of 37%, with the husband being 80, but his spouse 74, so based on her age.
Interest rates will be higher than for traditional mortgages, but have recently fallen somewhat. There will also be upfront processing fees which encompass appraisal costs , ILA ( Independent Legal Advice) and registration costs. Fees vary by lender but are usually in the $1800/2500 range. In sone cases we have seen promotional specials by reverse lenders with some of the processing charges waived during a promotional period.
There are now several lenders participating in the reverse field, and I am familiar with the products offered by all of them. While you can apply direct to those lenders, I can assist you in choosing the product and lender that best suits your need. There is no charge to you as the lender pays my fees . I'm a senior too ( 82) and missed the boat on getting one of these product for myself, as I sold my home and paid off my mortgage a few years ago, before values of homes escalated to current levels. I missed the boat-you don't have to.
There is also a lender operating in the field which offers a similar product, with no age restrictions and a maximum loan in the 45/47% range. In that type of loan the rate and processing fees will be higher, and the product is based on shorter term, likely two years. In some cases that would allow the loan to then be converted to a regular reverse mortgage after the homeowners have aged to meet the qualifying ratios for the new lender's product. Or even can be used short term for other business or investment purposes.