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.
Oregon Home Equity Conversion Mortgage (HELM), also known as a reverse mortgage, is a financial product that allows homeowners aged 62 and older to convert a portion of their home equity into tax-free cash without the need to sell their home or make monthly mortgage payments. This type of mortgage is specifically available for Oregon residents and is regulated by the Oregon Division of Financial Regulation (DR) to ensure consumer protection. A reverse mortgage is an attractive option for older homeowners who may have a substantial amount of equity in their homes but insufficient retirement funds to meet their financial needs. With an Oregon HELM, homeowners can tap into the equity they have built up over the years to supplement their retirement income, cover medical expenses, make home improvements, or simply enhance their quality of life. One of the key features of an Oregon HELM is that it provides homeowners with flexible payment options. Borrowers can choose to receive their funds as a lump sum, monthly payments, a line of credit, or a combination of these options. The payment plan can be tailored to each individual's financial goals and needs. There are different types of Oregon Home Equity Conversion Mortgage — Reverse Mortgages available to suit different situations: 1. FHA-insured Reverse Mortgages: These are the most common type of reverse mortgage and are insured by the Federal Housing Administration (FHA). They offer several protections for borrowers, including non-recourse loans, which means that the borrower or their estate will not owe more than the appraised value of the home. 2. Proprietary Reverse Mortgages: These are private loans offered by individual lenders and are not insured by the FHA. They are designed for higher-value homes and may provide larger loan amounts than FHA-insured mortgages. 3. Single-Purpose Reverse Mortgages: These types of reverse mortgages are offered by state and local government agencies or nonprofit organizations. They are designed for specific purposes, such as home repairs or property tax payments, and are usually available to borrowers with lower income levels. It is important to note that a reverse mortgage is a loan and will accrue interest over time. The loan is typically repaid when the borrower sells the home, moves out of the home, or passes away. However, the borrower or their heirs have the option to repay the loan and retain ownership of the home. Before considering an Oregon Home Equity Conversion Mortgage — Reverse Mortgage, homeowners are encouraged to consult with a certified reverse mortgage counselor to fully understand the terms, costs, and potential implications of this financial decision.
