The Colorado Springs Gazette final

Reverse mortgages a viable option for some

Reverse Mortgages allow qualified homeowners to convert their home equity into cash without selling their home or taking out a home equity loan. Historically, they have allowed people to cover a wide variety of living expenses without tapping into retirement or savings accounts.

“To qualify, an individual must be at least 62 years of age, own a house, condo or townhouse free and clear, or have at least 50% equity in their home,” explains Josh Stensrud, senior vice president of Legacy Bank. “The equity is based on current market value of the property.”

Homeowners are lent a portion to their equity in the home. These funds are not taxable and interest accrues on the funds advanced. No monthly payment is due from the homeowner.

“There are fees involved, including a lump sum for mortgage insurance, loan origination and servicing fees, such as appraisal, title search and insurance, inspections and recording fees, for example,” notes Stensrud. “Borrowers may finance these costs into the loan when sufficient equity is available.”

Payment of property taxes, maintenance and property insurance are required of homeowners with a Reverse Mortgage. Any existing traditional mortgage and/or Home Equity Loan already in place must be paid. At least one of the borrowers must occupy the home as their primary residence.

Married couples both holding title to the residence can be classified as borrowers. Should one spouse die, the survivor can continue to have access to proceeds and maintain residency. If only one spouse holds title to the home, both must consent to the loan. A surviving spouse wanting to keep the home will have to repay the loan through other means.

Legacy Bank is an equal housing opportunity lender.

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2021-10-24T07:00:00.0000000Z

2021-10-24T07:00:00.0000000Z

https://daily.gazette.com/article/283377655164932

The Gazette, Colorado Springs