Peace of Mind with Alpha Guaranty Trust Bank

Unlock the Value of Your Home with a Reverse Mortgage

What Is a Reverse Mortgage?

A reverse mortgage allows senior homeowners to access part of their home’s equity without having to make monthly loan repayments. Instead, the equity in the property is used as collateral, providing you with additional income or a lump sum when you need it most.

The loan generally becomes due when the last homeowner permanently leaves the residence or passes away. At that point, the estate has about six months to settle the loan balance, either by repayment or by selling the property. Any remaining equity goes to the estate, and if the home sells for less than the loan balance, the estate is not personally responsible for the difference.

Who Is Eligible?

To qualify for a Home Equity Conversion Mortgage (HECM), the following conditions apply:

• All borrowers must be at least 62 years of age.

• The home must be owned outright or have a low remaining mortgage balance that can be paid off at closing with reverse mortgage proceeds.

• There are no income or credit score requirements, making it accessible to many retirees.

Eligible Property Types

Most types of homes are eligible, including single-family homes, townhouses, and certain FHA-approved condominiums. Mobile homes may qualify if they:

• Are less than 30 years old

• Sit on land owned by the borrower

• Are permanently affixed to a foundation

• Pass FHA inspection requirements

Reverse Mortgage vs. Home Equity Loan

Traditional loans such as home equity loans, second mortgages, or HELOCs require strong income and credit. They also come with monthly repayment obligations.

By contrast, a reverse mortgage:

• Has no income or credit requirements

• Does not require monthly payments as long as you live in the home

• Pays you, rather than the other way around

The loan amount is calculated using an FHA formula based on your age, current interest rates, and the appraised value of your home.

Key Benefits

• No Monthly Repayments: The loan remains deferred while you live in the home.

• Flexible Payout Options: Choose how to receive funds — as a lump sum, fixed monthly payments, a line of credit, or a combination.

• You Can’t Outlive the Loan: As long as you live in the property as your primary residence and maintain taxes, insurance, and upkeep, the loan does not become due.

• Estate Protection: If the home sells for less than the loan balance, FHA covers the difference — protecting your heirs and other assets.

Inheritance & Estate

When the homeowner passes away or permanently leaves the home, the estate can decide to:

1. Repay the balance and keep the home

2. Sell the property and use the proceeds to settle the loan

If the property value exceeds the loan balance, the remaining equity belongs to the estate.

Loan Limits & Distribution Options

The amount you can borrow depends on:

• Your age (older borrowers qualify for more)

• Current interest rates

• Appraised property value

• Government lending limits

Ways to Receive Funds:

• Lump Sum: One-time cash at closing

• Tenure: Monthly payments for as long as you live in the home

• Term: Monthly payments for a set number of years

• Line of Credit: Flexible draw as needed

• Combination: Mix of the above

At Alpha Guaranty Trust Bank, our reverse mortgage solutions are designed to give you financial freedom, security, and peace of mind — while allowing you to remain in the comfort of your own home.