Flex Payment Mortgage
What is a Flex Payment Mortgage?
A Flex Payment Mortgage is commonly known as a reverse mortgage or home equity conversion mortgage (HECM)*. It works by enabling the borrower to access equity in their property and use it to supplement retirement income.
What are the qualifications for a Flex Payment Mortgage?
All prospective borrowers who are interested in a Flex Payment Mortgage must meet with a HUD approved counselor and undergo a financial assessment to determine if a Flex Payment Mortgage is the right solution. There are certain qualifications for a Flex Payment Mortgage that need to be met in order to be eligible.
Qualifications for a Flex Payment Mortgage:
- You are 62 years of age or older
- You own your home and use it as your primary residence
- The house is single family, multi-family (up to 4 units) or an approved condominium or manufactured home
- You own your own home free and clear or have a small amount left to pay on the existing mortgage
- Your home is in good condition prior to taking out the loan
Requirements for a Flex Payment Mortgage:
During the term of your Flex Payment Mortgage loan, you will still be required to pay:
- Property taxes
- Homeowner’s insurance
- Basic home maintenance
- Homeowner’s Association (HOA) fees, if applicable
Benefits of a Flex Payment Mortgage
If you qualify and are able to meet the requirements, there are several reasons why homeowners choose a Flex Payment Mortgage:
- Eliminate monthly mortgage payments
- Access the equity you have built in your home
- Supplement retirement income
- Loan amount is based on your age, home value, and current interest rate and can be dispersed in a lump sum or line of credit
- Loan does not have to be repaid as long as you are living in the home and meeting loan terms
Let’s connect so we can help you learn how a Flex Payment Mortgage loan works and you can decide if it’s the right choice for your situation.
Important information:
At the end of the Flex Payment Mortgage loan term, some or all of the property’s equity won’t belong to the borrower, and they may need to sell or transfer the property to repay the proceeds of the Flex Payment Mortgage. Guild will add the applicable Flex Payment Mortgage origination fee, mortgage insurance premium, closing costs, or servicing fees to the balance of the loan which will grow, along with the interest, over time. Interest isn’t tax deductible until all or part of the loan is repaid. Failing to pay property taxes, insurance, and maintenance might subject the property to a tax lien, foreclosure, or other encumbrance since the borrower retains the title.
*Fixed-rate loans are distributed in a single lump sum with no future draws. Adjustable-rate mortgages offer five payment options and allow for future draws. The age of the youngest borrower determines the amount of funds available that can be received during the first 12-month period, subject to an initial disbursement limit. Flex Payment Mortgage is Guild’s version of a reverse mortgage. HECMs are federally insured by the Federal Housing Administration (FHA).
These materials are not from HUD or FHA and were not approved by HUD or a government agency.
All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.