Put Your Home Equity to Work in South Carolina
For South Carolina homeowners age 62 and older, a reverse mortgage may provide another way to use the equity you've built in your home while continuing to live there. A Home Equity Conversion Mortgage (HECM) can allow qualified homeowners to access a portion of their home equity without the monthly principal and interest payments associated with a traditional mortgage.
Whether you're planning to remain in your current South Carolina home, looking for additional financial flexibility during retirement, or considering purchasing a home that better fits your lifestyle, Edgewater Residential Capital can help you explore your reverse mortgage options and understand whether a HECM may fit your goals.
Put Your Home Equity to Work
For many South Carolina homeowners, the home represents one of their largest financial assets. A reverse mortgage may allow qualified homeowners age 62 and older to access a portion of their home equity without the required monthly principal and interest payments associated with a traditional mortgage.
Reverse mortgage proceeds may provide greater financial flexibility for homeowners who want to remain in their current home, supplement retirement resources, make improvements to their property or plan for future expenses.
A reverse mortgage is not the right solution for everyone. Understanding the loan, its costs, borrower responsibilities and long-term impact is an important part of deciding whether it fits your goals.
Reverse Mortgage Highlights
- Designed for eligible homeowners age 62 and older
- No required monthly principal and interest mortgage payments
- Borrowers retain ownership of the home
- The home must generally remain the borrower's primary residence
- Borrowers remain responsible for taxes, insurance and home maintenance
- HECM loans include important federal consumer protections
- A HECM may also be used to purchase a new primary residence
How Does a Reverse Mortgage Work?
A reverse mortgage allows an eligible homeowner to borrow against a portion of the equity in a primary residence. Instead of making required monthly principal and interest payments to the lender, the homeowner receives access to loan proceeds according to the terms of the reverse mortgage.
The homeowner continues to own the property. The loan generally does not become due until the last surviving borrower or remaining eligible non-borrowing spouse permanently leaves the home, the home is sold, the borrower passes away or the borrower fails to meet the obligations of the loan.
Why Do South Carolina Homeowners Consider a Reverse Mortgage?
Supplement Retirement Resources
Some homeowners use reverse mortgage proceeds to help supplement retirement cash flow or provide additional resources for ongoing living expenses.
Remain in the Home You Love
Home equity may provide additional flexibility for homeowners who would like to remain in their current home during retirement.
Home Repairs & Improvements
Reverse mortgage proceeds may be used for eligible home repairs, improvements or modifications designed to make a home better suited for aging in place.
Pay Off an Existing Mortgage
Depending upon available equity and the individual circumstances of the borrower, a reverse mortgage may be used to pay off an existing mortgage.
Plan for Future Expenses
Some homeowners use available reverse mortgage proceeds as part of a broader plan for retirement expenses, unexpected costs or other financial needs.
Purchase Your Next Home
Qualified borrowers may also be able to use a HECM for Purchase to help buy another primary residence that better fits their retirement lifestyle.
Who May Qualify for a Reverse Mortgage?
The FHA-insured Home Equity Conversion Mortgage program is designed for eligible homeowners age 62 and older. Qualification depends upon several factors, including the borrower's age, property, available equity and financial circumstances.
- At least one eligible borrower must generally be age 62 or older
- The property must generally be the borrower's primary residence
- The homeowner should have sufficient equity in the property
- Existing mortgage obligations may need to be satisfied at closing
- The borrower must be able to meet continuing property obligations
- A financial assessment is part of the qualification process
Borrower Responsibilities
Although monthly principal and interest payments generally are not required, reverse mortgage borrowers have important continuing responsibilities.
- Live in the property as the primary residence
- Keep the property in good repair
- Pay property taxes when due
- Maintain homeowners and hazard insurance
- Pay applicable HOA, condominium or other property charges
- Comply with the remaining terms of the mortgage
Buy a Home in South Carolina With a HECM for Purchase
A reverse mortgage does not have to be limited to the home you currently own. Qualified borrowers age 62 and older may be able to use a HECM for Purchase to help purchase a new primary residence.
A HECM for Purchase combines funds provided by the buyer with proceeds from the reverse mortgage. This may allow some buyers to purchase a home without paying the entire purchase price in cash and without taking on the required monthly principal and interest payments associated with traditional mortgage financing.
This may be worth exploring if you are considering downsizing, moving closer to family, purchasing a lower-maintenance home, relocating to a South Carolina retirement community or simply finding a home that better fits your current lifestyle.
Planning a Move During Retirement?
A HECM for Purchase may help some borrowers preserve more of their savings while purchasing a home that better meets their needs. The required amount of funds brought to closing varies according to factors such as the borrower's age, interest rates and the purchase price of the home.
What Types of Homes May Be Eligible?
Eligible property types may include several common residential property types, subject to FHA and program requirements.
Potentially Eligible Properties
- Single-family residences
- Certain two- to four-unit properties
- FHA-approved condominiums
- Townhomes
- Planned unit developments
- Certain modular homes
Primary Residence Requirement
A HECM is intended for a primary residence. Investment properties, vacation homes and second homes generally are not eligible for HECM financing.
Property eligibility can depend upon the specific home and current program requirements, so it is important to review the property with a mortgage professional.
When Does a Reverse Mortgage Have to Be Repaid?
A reverse mortgage generally becomes due when the last surviving borrower or remaining eligible non-borrowing spouse permanently leaves the property, the home is sold or certain borrower obligations are no longer met.
Reverse mortgages are generally structured as non-recourse loans. This means that, under applicable program rules, the borrower or estate is not required to repay more than the value of the property when the loan becomes due.
What Options Do Heirs Have?
When the loan becomes due following the death of the borrower, heirs or the estate may have several options depending upon the circumstances and current program rules.
- Sell the home and use the proceeds to repay the reverse mortgage
- Use personal or estate funds to satisfy the loan balance
- Obtain other financing to pay the reverse mortgage balance
- Purchase the home subject to applicable HECM repayment provisions
Families should discuss their goals for the home as part of the reverse mortgage decision-making process.
Reverse Mortgage Lending Throughout South Carolina
Edgewater Residential Capital helps South Carolina homeowners and homebuyers understand mortgage options designed around their individual circumstances. Whether you are looking to access equity in the home you already own or are considering purchasing another home during retirement, we can help you explore whether a reverse mortgage may fit your plans.
We can assist clients throughout South Carolina, including Rock Hill, Fort Mill, Tega Cay, Lake Wylie, Clover, York, Greenville, Spartanburg, Columbia, Charleston, Summerville, Myrtle Beach, Hilton Head and surrounding South Carolina communities.
Reverse Mortgage Counseling
Education is an important part of the reverse mortgage process. HECM applicants work with an independent HUD-approved reverse mortgage counselor who can help explain the program, borrower responsibilities, costs, alternatives and other considerations.
Counseling is designed to help homeowners make an informed decision about whether a reverse mortgage is appropriate for their individual circumstances.
South Carolina Reverse Mortgage Frequently Asked Questions
What is a reverse mortgage?
A reverse mortgage is a loan that allows an eligible homeowner to access a portion of the equity in a primary residence. A Home Equity Conversion Mortgage, commonly called a HECM, is a federally insured reverse mortgage program for eligible borrowers age 62 and older.
How old do I have to be for a HECM reverse mortgage?
HECM reverse mortgages are designed for eligible borrowers age 62 and older. Age can also affect the amount that may be available through the reverse mortgage.
Do I still own my home with a reverse mortgage?
Yes. The borrower retains ownership of the property while the reverse mortgage is in place. The borrower must continue to comply with the loan requirements, including maintaining the home and keeping required property charges current.
Do I have to make monthly mortgage payments?
HECM borrowers generally are not required to make monthly principal and interest mortgage payments. However, the borrower remains responsible for property taxes, homeowners insurance, maintenance and applicable property charges.
Can I get a reverse mortgage if I still have a mortgage?
It may be possible. Existing mortgage obligations generally must be satisfied as part of the reverse mortgage transaction. Eligibility depends upon factors including the available home equity and the individual borrower's circumstances.
Can I use a reverse mortgage to buy another home?
Yes. Qualified borrowers age 62 and older may be able to use a HECM for Purchase to purchase a new primary residence. The borrower provides a portion of the purchase funds and the HECM provides the remaining eligible financing.
What happens to the reverse mortgage when I die?
When the last surviving borrower or remaining eligible non-borrowing spouse passes away or permanently leaves the property, the loan generally becomes due. Heirs may have options that include selling the property, satisfying the loan balance with other funds or obtaining other financing.
Can I sell my home if I have a reverse mortgage?
Yes. A homeowner may sell a home that has a reverse mortgage. The reverse mortgage balance is generally repaid from the sale proceeds at closing.
Can I pay off a reverse mortgage early?
Reverse mortgage borrowers may generally repay all or part of the outstanding loan balance before it becomes due, subject to the terms of the loan.
Is a reverse mortgage right for everyone?
No. Reverse mortgages can be useful financial tools for some homeowners, but they are not right for everyone. Homeowners should consider how long they plan to remain in the home, ongoing property expenses, available alternatives, family plans and their overall financial situation.
Let's Talk About Your South Carolina Reverse Mortgage Options
Every homeowner's situation is different. Contact Edgewater Residential Capital to discuss your goals and learn whether a reverse mortgage or HECM for Purchase may be an option for you.
R. Kim Brannon
Owner / MLO
Edgewater Residential Capital Inc.
Important Reverse Mortgage Information: Borrowers remain responsible for property taxes, homeowners insurance, applicable property charges and maintaining the property. The home must generally remain the borrower's primary residence. Failure to meet applicable loan obligations may cause the loan to become due and payable.
Reverse mortgage eligibility, proceeds, costs and program requirements depend upon the borrower, property and current loan program guidelines. Information presented on this page is for general educational purposes and is not a commitment to lend.
Edgewater Residential Capital Inc.
NMLS #1577717