Considering a Reverse Mortgage?

Here are some things you should know.

Reverse mortgages are becoming popular.

The U.S. Department of Housing and Urban Development (HUD) created one of the first, available to you through Bridgewater Savings
Bank, an FHA-approved lender. HUD’s Reverse Mortgage is a federally-insured private loan.

Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements, and more.

Since your home is probably your largest single investment, it’s smart to know more about reverse mortgages, and decide if one is right for
you!

Here are some answers to frequently asked questions:

Q. What is a reverse mortgage?

A. A reverse mortgage is a special type of home loan that lets homeowners convert a portion of their home equity into cash. But unlike a traditional home equity loan or second mortgage, repayment is not required until the homeowner no longer uses the home as a
principal residence.

Q. Will I still have an estate that I can leave to my heirs?

A. When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from
the reverse mortgage, plus interest and other fees. The remaining equity in your home, if any, belongs to you or to your heirs. None of
your other assets will be affected by HUD’s reverse mortgage loan. This debt will never be passed along to the estate or heirs.

Q. What's the difference between a reverse mortgage and a bank home equity loan?

A. To qualify for a traditional home equity loan or second mortgage, you must have sufficient current income to repay the loan. And, you are required to make monthly mortgage payments. A reverse mortgage is different in that it pays you, and is available regardless of your current income. You don’t make payments, because the loan is not due as long as the house is your principal residence. Like all homeowners, you still are required to pay your real estate taxes and other conventional payments like utilities, but with an FHA-insured HUD Reverse Mortgage, you cannot be foreclosed or forced to vacate your house because you “missed your mortgage payment.”

Q. How do I qualify for a HUD reverse mortgage?

A. To be eligible for a HUD reverse mortgage, you must be a homeowner 62 years of age or older; own your home outright or have a low mortgage balance; and must live in the home. You are also required to receive consumer information from a HUD-approved counseling source prior to obtaining the mortgage. You can call Bridgewater Savings for the name and telephone numbers of HUD-approved counseling agencies for your area.

Q. What types of homes are eligible?

A. Your home must be a one- to four-unit property that you own and occupy. Townhouses, detached homes, units in condominiums and
some manufactured homes are also eligible. Condominiums must be FHA-approved.

Q. Can the lender take my home away if I outlive the loan?

A. No! You do not need to repay the loan as long as one of the borrowers continues to live in the house and keeps the taxes and insurance current. You will never owe more than your
home’s value.

Q. How much money can I get from my home?

A. The amount you can borrow depends on your age, current interest rates, and the appraised value of your home (or FHA mortgage limits for your area, whichever is less).Generally, the more valuable your
home, the older you are, and the lower the interest rate – the more you can borrow.

Q. Should I use an estate planning service that charges a fee to find a reverse mortgage?

A. HUD does not recommend using an estate planning service – or any service – that charges a fee just for referring a borrower to a lender. In fact, HUD cautions seniors to beware of scam artists that charge thousands of dollars for information that is free from HUD and reputable lenders like Bridgewater Savings!

Q. How do I receive my payments?

A. Once you have decided that a reverse mortgage is a viable option for your financial situation, it is time to investigate the loan disbursement options available – from a lump sum distribution to a line of credit that you can tap at will. Your Bridgewater Savings loan officer can explain all of the options and help you decide which is best for you.

Contact Bridgewater Savings

For more information on reverse mortgages please call Michelle Durette at (508)884-3372 or Ron Hill at (508)884-5727.