Reverse Mortgate: Another Tool in Your Toolbox
An Introduction to Reverse Mortgages
For many New Hampshire homeowners age 62 and older, home equity is one of the largest assets they own. Some may want to sell and buy a home that better meets their current needs — downsizing or “rightsizing” — while others want to age in place. A reverse mortgage is one option worth understanding because it can be a great solution for either goal.
What is a reverse mortgage?
The most common type is a Home Equity Conversion Mortgage (HECM), insured by the FHA. It allows homeowners 62+ with significant equity to convert a portion of their home’s value into cash — either as a lump sum, a line of credit, monthly payments, or a combination. It can also make buying a new home more affordable and achievable.
Two options worth knowing about
HECM for Purchase (H4P) allows homeowners 62+ to buy a new primary residence — downsizing, moving closer to family, or relocating to New Hampshire — using a reverse mortgage after making a substantial down payment. The result is no monthly mortgage payment on the new home. In addition to HECMs, there are private, non-FHA reverse mortgages that may offer more flexibility in certain situations.
How reverse mortgages work
Your reverse mortgage loan officer will help you understand how much equity you may be able to access and the different ways you can receive it. You remain the owner of your home. The loan is repaid when the last surviving borrower sells the home, moves out permanently, or passes away, typically through the sale of the property. Any remaining equity goes to the homeowner or heirs. Most reverse mortgages are nonrecourse, meaning borrowers and heirs never owe more than the home is worth.
What homeowners still need to do
A reverse mortgage doesn’t eliminate homeownership responsibilities. Borrowers must continue paying property taxes, homeowners insurance, and HOA dues, and must maintain the home.
Builtin consumer protections
Before closing, every borrower completes a counseling session with a HUDapproved, independent counseling agency. This isn’t a sales step — it’s a safeguard to ensure homeowners fully understand the terms, costs and alternatives before moving forward.
Is it right for you?
Reverse mortgages aren’t for everyone. They generally require substantial home equity and tend to make the most sense for homeowners who plan to remain in their home long-term — or who want to sell and purchase a more suitable home using H4P. Because the amount available depends on age, home value, existing mortgage balance and other factors, the best next step is a conversation with a licensed mortgage professional who can review your specific situation and alternatives.
Find more information at www.NHreversemortgages.com Renee Duval, NMLS# 97967, is a mortgage broker with Bookend Lending LLC (NMLS# 2557411), licensed by the New Hampshire Banking Department.