Find the Best Reverse Mortgages in Beaver Dam, WI

Different types of reverse mortgages in Beaver Dam

Beaver Dam residents use reverse mortgages to supplement monthly income, pay for health care, pay off a mortgage and for other purposes. The amount you can borrow is based on factors like your age, the value of your home, current interest rates, your financial profile and the type of reverse mortgage you choose.

There are three main types of reverse mortgages in Beaver Dam:

• Home Equity Conversion Mortgage (HECM): A HECM is the most common type of reverse mortgage. It is federally insured, and borrowers can use the funds for anything. To apply for a HECM, you must meet with an independent, government-approved counselor to go over the loan’s costs and alternatives to a HECM. A HECM has a maximum borrowing limit of $765,600 at the time of publishing.
• Proprietary reverse mortgage: A proprietary reverse mortgage is a privately backed loan. The application requirements and qualifications for this type of reverse mortgage can differ from a HECM and from lender to lender. Many of these reverse mortgages are jumbo reverse mortgages, with higher borrowing limits for owners of higher-value homes.
• Single-purpose reverse mortgage: A single-purpose reverse mortgage can only be used for a purpose the lender decides, like remodeling a home or paying property taxes. It’s the least expensive type of reverse mortgage and is offered by local and state government agencies and nonprofits.

Reverse mortgage requirements in Beaver Dam

To apply for a HECM, the most common type of reverse mortgage in Beaver Dam, you must:

• Be at least 62
• Own your home outright or have paid down a considerable amount
• Live in the property as your primary residence
• Be able to afford to continue paying property taxes and homeowners insurance premiums
• Not be behind on any federal debt
• Take part in a consumer information session with an government-approved counselor

Your property must also meet Federal Housing Administration property standards and flood requirements.

Keep in mind that requirements may differ slightly for proprietary reverse mortgages and single-purpose reverse mortgages. For all types, you will need to show proof of income and assets and list your monthly living expenses. The lender will also check your credit.

Beaver Dam reverse mortgage FAQ

What is a reverse mortgage?

A reverse mortgage is a type of loan available to adults 62 or older who want to convert their home equity into cash. The borrower keeps the title to the home, and the loan isn’t due until the borrower moves out or dies. There are several types of reverse mortgages and ways to receive the funds. Reverse mortgages have interest and fees and a balance that goes up over time.

How does a reverse mortgage work in Beaver Dam?

A reverse mortgage gives the borrower cash in exchange for equity in their home. The borrower keeps the title, and the loan doesn’t need to be repaid until the borrower moves out or dies. The money is usually tax-free and doesn’t affect Social Security or Medicare benefits. Reverse mortgages, like other loans, have fees and interest rates.

Is a reverse mortgage a rip-off?

Before taking out a reverse mortgage, you should be fully aware of all the costs and features of the loan. The Consumer Financial Protection Bureau emphasizes that a reverse mortgage isn’t “free money.” Remember that it is a loan with fees and interest, and as the loan balance increases over time, your equity in your home decreases. Meet with an independent counselor, if possible, instead of getting all your information from a salesperson. And be on the alert for reverse mortgage scams.