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.
A Nevada Home Equity Conversion Mortgage (HELM), also known as a reverse mortgage, is a specialized loan program designed specifically for homeowners aged 62 years or older. With a HELM, seniors can convert a portion of their home's equity into tax-free income or a line of credit, without the need to sell or move out of their home. In Nevada, just like in other states, there are different types of HELM or reverse mortgages available to suit various needs and preferences. The most common types include: 1. Standard HELM: This is the traditional version of a reverse mortgage, offering borrowers the choice of receiving funds as a lump sum, fixed monthly payments, or a line of credit. 2. HELM for Purchase: This type of reverse mortgage is specifically tailored for seniors who wish to purchase a new primary residence. It allows the borrower to buy a new home while simultaneously eliminating monthly mortgage payments. 3. HELM Line of Credit: With this option, homeowners can create a pool of funds that they can draw upon whenever needed. The unused portion of the line of credit can grow over time, providing borrowers with greater financial flexibility in the future. 4. HELM Refinance: Seniors who already have a reverse mortgage may consider refinancing to access additional proceeds or take advantage of lower interest rates. This option allows them to refinance their existing HELM into a new loan. 5. HELM for Home Repairs: Designed for seniors who need funds to make necessary home repairs or modifications, this type of HELM provides financing for home improvements that can enhance safety, accessibility, and overall quality of life. 6. Proprietary Reverse Mortgage: These are private loans that are not insured by the Federal Housing Administration (FHA). Proprietary reverse mortgages may have higher borrowing limits and fewer restrictions, offering seniors with higher-value homes greater access to their equity. In Nevada, the eligibility criteria for a HELM include being at least 62 years old, owning a home as a primary residence, participating in a mandatory counseling session by a HUD-approved counselor, and meeting certain financial requirements. The loan amount available to borrowers is based on factors such as the home's value, the borrower's age, and current interest rates. It is important for seniors considering a Nevada Home Equity Conversion Mortgage — Reverse Mortgage to carefully evaluate their financial situation, discuss the options with a trusted lender or mortgage professional, and fully understand the terms and implications of the loan.
