A reverse mortgage is a loan from the U.S. Government for 50% to 75% of the value of a home owned by a homeowner aged 62 and older. Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to the homeowner. The funds from a reverse mortgage are tax-free. The loan doesn't have to be repaid in the homeowner's lifetime, however, when the homeowner dies, the money received plus approximately 4% interest is repaid by their estate. The loan is repaid when the homeowner ceases to occupy the home as a principal residence, due to the homeowner (the last remaining spouse, in cases of couples) passing away, selling the home, or permanently moving out.
Guam Home Equity Conversion Mortgage (HELM) — Reverse Mortgage is a financial product designed to assist homeowners in Guam who are aged 62 or older to convert a portion of their home equity into usable funds. This is especially useful for retirees or seniors who want to enhance their financial stability without the need to sell their property. A Guam HELM — Reverse Mortgage works by allowing homeowners to borrow against the equity they have built up in their homes over the years. The loan amount is determined based on factors such as the appraised value of the property, the borrower's age, current interest rates, and the chosen payment plan. Unlike a conventional loan, in a reverse mortgage, the borrower is not required to make monthly mortgage payments. Instead, the loan is repaid when the borrower decides to sell the home, moves out of the property, or passes away. One of the key advantages of a Guam HELM — Reverse Mortgage is that it provides borrowers with flexibility regarding how they receive funds. There are different payment options available, and borrowers can choose to receive a lump sum payment, a line of credit, fixed monthly payments, or a combination of these methods. Some different types of Guam HELM — Reverse Mortgage include: 1. Fixed Rate: This type of reverse mortgage provides borrowers with a lump sum payment or fixed monthly payments, offering stability and predictability regarding loan terms and interest rates. 2. Adjustable Rate: With an adjustable-rate reverse mortgage, borrowers can choose to receive funds via a line of credit, regular installments, or a combination of both. The interest rate fluctuates periodically, based on market conditions. 3. HELM for Purchase: This enables seniors to purchase a new home by utilizing a reverse mortgage, combining the home purchase and loan process into a single transaction. 4. HELM Refinance: This option allows homeowners with an existing mortgage to refinance it into a reverse mortgage, eliminating the need for monthly mortgage payments and potentially freeing up additional cash flow. Guam HELM — Reverse Mortgages can offer financial relief to older homeowners by unlocking the equity held in their properties. It's essential, however, to thoroughly understand the terms, repayment requirements, and possible implications before entering into such a loan agreement. Seeking advice from financial professionals and consulting reputable lenders can ensure homeowners make well-informed decisions regarding their housing wealth and retirement plans.
