You dream of a stress-free retirement but aren’t sure how to make it happen. One option is a reverse mortgage, which allows you to tap your home equity to get the cash you need without having to make monthly mortgage payments. You must continue to maintain the home, pay property taxes and homeowners insurance, and comply with loan terms. To learn more about how reverse mortgages work and where to find a reputable lender, please continue.
About AAG
American Advisors Group (AAG) is a reputable reverse mortgage lender. It’s also the leading provider of Home Equity Conversion Mortgage (HECM) loan solutions nationwide. It was founded in 2004 by the current CEO, Reza Jahangiri, to help older individuals navigate retirement more easily and alleviate financial stress.
How Does an AAG Reverse Mortgage Work?
When you take out a traditional mortgage, you’ll make monthly principal and interest payments to the lender. But a reverse mortgage works the other way around — the lender makes payments to the borrower. The amount you’re eligible for is based on the equity you have in your home, along with other factors, including your age and the prevailing interest rate.
You can stay in the home as long as you properly maintain it and make payments for homeowners insurance and property taxes. When you sell the home, leave it permanently, or pass away, the loan becomes due and payable.
Options for repayment include selling the home, with borrowers or the heirs keeping any sale proceeds that exceed the loan balance. If heirs wish to retain the home, they can pay the loan balance in full or purchase the home at 95% of its appraised value, whichever is less. Should the loan balance be greater than the home’s appraised value, borrowers can simply hand over the keys to the home, an action known as a deed-in-lieu foreclosure. FHA insurance makes up for any shortfall. This is an important FHA insurance protection.
Is a Reverse Mortgage Right For You?
A reverse mortgage lets you access your home equity without having to make monthly payments. It could be ideal for your financial situation in these situations:
- You want to convert a portion of your home’s equity into cash and receive it in monthly payments to increase your cash flow during retirement.
- Your home equity had increased significantly because you purchased when prices were low, and you want to pull a portion out through a reverse mortgage or refinance.
- You want to eliminate your monthly mortgage payment and access cash to cover the cost of renovations that would make your home more habitable. You are still responsible for maintaining the home, paying property taxes and homeowners insurance, and otherwise complying with loan terms.
- You want to buy a new home that doesn’t come with a monthly mortgage payment. You are still responsible for home maintenance, property taxes and homeowners insurance, and complying with all loan terms.
- You seek a reverse mortgage line of credit that increases as time progresses.
- You want to retire early but need a steady cash flow to achieve this goal.
Types of Reverse Mortgage Loans Available Through AAG
AAG features four reverse mortgage options:
Lump-Sum Payout
If you opt to receive the loan proceeds in a lump sum, you can withdraw up to 60 percent of the amount in the first year.
Growing Line of Credit
You can also get a line of credit that grows over time — the longer it remains untapped, the more the line will increase.
Term or Tenure
You can select a term reverse mortgage if you’d prefer to receive fixed monthly payments over a set period. However, a tenure reverse mortgage is better if you want to receive fixed monthly payments until you pass away. With all payout options, you are responsible for home maintenance, property taxes and homeowners insurance and complying with all loan terms.
Reverse for Purchase
You can use a reverse for purchase mortgage to buy a home that best suits your long-term housing needs, and you won’t be on the hook for monthly mortgage payments. You are still responsible for home maintenance, payment of property taxes and homeowners insurance, and compliance with loan terms.
How Long Does It Take to Get a Reverse Mortgage from AAG?
It depends, but AAG prides itself on providing a fast, seamless mortgage process from application through funding.
How to Qualify for an AAG Reverse Mortgage?
You may be eligible for a reverse mortgage loan if you’re at least 62 years of age, own the home with sufficient equity, and use it as your primary residence.
Are There Safeguards in Place When Getting an AAG Reverse Mortgage?
Safeguards are in place to help ensure reverse mortgages best suit the needs of older adults.
Reverse Mortgage Counseling
Borrowers must complete reverse mortgage counseling with an independent, HUD-approved counseling agency.
Financial Assessment
AAG also has a mandatory financial assessment that all potential borrowers must complete before taking out a reverse mortgage. Doing so reassures the lender that you can make timely homeowners insurance and property tax premium payments.
Non-borrowing Spouse
If your spouse hasn’t yet reached 62 years of age, they can be classified as an eligible non-borrowing spouse. This designation allows them to stay in the home in the unfortunate event that you pass away. Still, they must maintain the property and continue making property tax and homeowners insurance payments.
How to Get Started with a Reverse Mortgage from AAG
Complete the online form when you’re ready to learn more about how AAG can help you put your home equity to good use. A team member will reach out to discuss reverse mortgage solutions that may be available to you.
