What is a Reverse Mortgage?
A reverse mortgage is a loan that allows homeowners age 62 and older to convert part of their home equity into cash without selling their home or making monthly mortgage payments. The loan is repaid when the borrower sells the home, moves out, or passes away.
The most common type is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA). This federal insurance provides certain protections for borrowers. In Nebraska, they are often used for retirement planning and long-term housing stability.
Reverse mortgages can provide financial flexibility in retirement, but they’re complex products that require careful consideration. HUD-approved counseling is required before obtaining a HECM to ensure borrowers understand the implications.
Potential Benefits of Reverse Mortgages
Understanding how reverse mortgages work can help you determine if this option might fit your retirement planning needs.
Access to home equity
Funds may be received without monthly mortgage payments.
Retain home ownership
Borrowers remain on title while meeting loan obligations.
Flexible payout options
Funds may be received as a lump sum, line of credit, or periodic payments.
Deferred repayment
Loan balance is typically due when the home is sold or vacated.
Who Might Consider a Reverse Mortgage?
Reverse mortgages are designed for older homeowners with long-term housing plans.
- Homeowners aged 62 or older
- Retirees seeking supplemental funds
- Borrowers planning to remain in their home
- Homeowners with substantial equity
Things to Consider
Reverse mortgages involve long-term financial considerations.
- Property taxes and insurance remain required
- Loan balance increases over time
- Counseling is required
- Remaining equity may affect heirs
- Eligibility for loan programs depends on your specific financial situation, credit profile, and property details. This information is for educational purposes only and does not constitute a commitment to lend.
Are reverse mortgages available in Nebraska
Yes. Reverse mortgages are available statewide, including Lincoln, Omaha, and many rural areas.
When does a reverse mortgage need to be repaid
Repayment typically occurs when the home is sold, vacated, or no longer the primary residence.
Do borrowers keep ownership of the home
Yes. Borrowers retain title to the home while meeting loan obligations.
Are reverse mortgages only for retirees
They are designed for older homeowners, often retirees, but eligibility is based on age rather than employment status.