Bay Equity is a proud member in good standing with the National Reverse Mortgage Lenders Association and subscribes to it's comprehensive Code of Ethics.

Reverse Mortgages are highly customizable to fit your situation. The amount of money available is based on the age of the younger borrower, the value of the home, and current interest rates. The proceeds must first be used to pay off any existing loans or liens against the property and the remaining funds can be disbursed in any number of ways. Some seniors choose to take a guaranteed payment for life, others choose to take it for a specific term. There is also the ability to draw cash at closing or leave the funds in a growing line of credit for future use. The more common way is to blend these choices.

Like traditional home loans or lines of credit, you don’t give up the ownership of your home. A reverse mortgage is simply a lien against your home. You are free to refinance, pay off the loan without penalty should you wish (although no monthly payments are required) or sell the home should your needs change. You will still be able to pass the home to your heirs. In the event that more is owed on the loan balance than the future value of the home, neither you nor your estate will have to make up the difference.

Because you will continue to own the home, you are responsible for payment of property taxes, homeowner’s insurance, Homeowners Association due (if any) will continue to be your responsibility. You may elect to have a portion of the funds set aside for future payment of taxes and insurance.

The loan will continue as long as at least one borrower lives in the property as a primary residence, or in the case of a non-borrowing spouse, while that spouse remains in the home. Otherwise, the loan will come due only when the homeowner fails to pay property taxes, insurance, property related charges, or fails to comply with the terms of the financing instruments.

Because the funds are the proceeds of a loan, they are not considered taxable income and will not affect Social Security, Medicaid, or pension income. Some forms of subsidized Medicaid have restrictions on cash on hand so we will work with you to structure the loan in such a way as to avoid any reduction in services.

One of the ways that seniors use the reverse mortgage is by leaving the funds available for future use in a growing line of credit. Any unused funds available in the line will grow over time, resulting in a larger cash amount in the future. Some seniors use this line of credit to offset investment risks, fund short-term purchases, or to simply let the line grow in value as a hedge against future expenses. Strategically used, a reverse mortgage can serve as a backstop against portfolio declines or exhaustion.

• National Council on Aging

• National Reverse Mortgage Lenders Association: Self Evaluation

• National Reverse Mortgage Lenders Association: Toolkit for Choosing the Right Home Environment

• National Reverse Mortgage Lenders Association: Recognize & Report Financial Abuse

• National Reverse Mortgage Lenders Association: What Do I Do When My Loan is Due?