LEXINGTON REVERSE is a service of Lexington Investment Mortgage Company that specializes in reverse mortgage programs.
Definition
A reverse mortgage is a unique financial tool that enables homeowners ages 62 and over to tap into their home’s equity. The funds are tax-free (consult tax advisor), and no repayment is required until the homeowner permanently leaves the home. The recipient retains title to the property.
Qualifications
- Must be at least 62 years of age
- Home must be the primary residence
- Home does not need to be owned “free and clear,” reverse mortgages can be used to pay off existing mortgages
- No income requirements
- Minimal credit check
Benefits
- Easy access to the equity built in your home
- Tax-free* monthly income
- Eliminates monthly mortgage payments
- Receive funds through a combination of payment options
- Allows homeowners to continue living at home
- Provides funds to improve quality of life and can be used for any purpose, such as paying for family caregivers, home repairs, care coordinators or prescription drugs
Amount of Funding
Funds are based on the home value, the number and age of the homeowner(s), the current interest rate, and the maximum allowable lending limit under the chosen program.
Counseling
To obtain a reverse mortgage, clients are required to receive free counseling from a third party HUD approved counseling agency. LEXINGTON REVERSE will provide you with a list of counselors. Counseling over the phone could be an option.
Payment Plans
LEXINGTON REVERSE offers the following payment plans:
- Tenure
- Recipient receives an equal monthly check for as long as they live in the home
- Line of Credit
- Recipient can draw up to the maximum available amount at any time and in any amount. The remaining line of credit balance increases based on an annual growth rate.
- Lump Sum Cash Advance
- A lump sum of cash is distributed to the recipient at closing.
- Term
- Recipient receives a defined amount each month for a specified term. This is useful if the recipients want or need more cash each month and/or do not expect to remain in their home for their remaining lives.
- Modified
- Recipient may opt to receive funds in a combination of the above options (e.g., ½ as a lump sum, ¼ in a line of credit, and ¼ as a monthly check).
Processing Time
The average time to process and close a reverse is 6-8 weeks.
Closing Costs
Most closing costs are financed into funding. LEXINGTON REVERSE will provide you with a Good Faith Estimate of Closing Costs.
Interest Rate
The interest rates vary depending on the reverse program selected by the client. All programs offer adjustable rates, with lifetime caps on the maximum allowable rate.
Impact on Income Taxes and Social Security
Proceeds from a reverse mortgage are funds from a mortgage loan and are not considered income. Therefore, the funds received are not subject to income tax and may not affect Social Security benefits. Recipients receiving Medicaid or SSI may not be affected if the funds from the reverse mortgage are spent in the month they are received and all other government requirements/restrictions are met. As always, LEXINGTON REVERSE recommends that you consult with your tax advisor and appropriate governmental agencies for further advice.
Repayment
The reverse becomes due and payable at the time the recipient(s) permanently leaves the home. The reverse mortgage can be repaid either from the proceeds of the sale of the property or other liquid assets, or the heirs can obtain a conventional mortgage to pay off the reverse mortgage. Remaining equity belongs to the recipient or their heirs.
