Monthly Tenure Reverse Mortgage

For retirees and senior citizens who plan to stay in their homes for the foreseeable future, ensuring adequate cash flow over a long time frame is a top priority. As cost of living increases for Social Security and private pension plans stagnate, homeowners are turning to a potentially lucrative source of cash: monthly tenure reverse mortgages.

What Is a Reverse Monthly Tenure Mortgage?

Also known as a reverse annuity mortgage, a monthly tenure reverse mortgage allows you to tap the equity in your home for as long as you live in it. When a monthly tenure reverse mortgage is jointly held by a married couple, the payment agreement remains in force for as long as one spouse remains in the home.

What Is a Tenure Payment Plan?

A tenure payment plan is a monthly reverse mortgage payment plan that provides equal-sized cash payments for an indefinite length of time. The agreement doesn't terminate until you and your spouse—leave the residence to which the loan is attached. The rate at which tenure payments are issued is generally tied to the age of the primary borrower.

For cash-strapped seniors who wish to enjoy full, active retirements, these payments are indispensable. After your primary mortgage loan has been paid in full, a reverse mortgage holder has full discretion over the proceeds from these tenure payments. Common uses include:

  • Supplementing social security benefits

  • Medical Costs

  • Home repairs, renovations, improvements, or additions

  • Travel and leisure outlays

  • Debt repayment or refinancing

Additionally, many financial advisors encourage seniors and retirees to supplement existing streams of income from Social Security and private pensions with monthly tenure reverse mortgage payments.

Benefits of a Tenure Payment Plan

Like other types of reverse mortgages, tenure payment plans have some key advantages. These include:

  • Full coverage from the Federal Housing Administration (FHA) 

  • Predictable, secure monthly payouts that can supplement other streams of retirement income

  • Indefinite time frames that range from a matter of months to multiple decades

  • Full, unfettered use of the reverse-mortgaged home

  • Relief from the burden of a traditional mortgage

  • No collateral requirements aside from the home itself

Federal Housing Administration Mortgage Insurance

The Federal Housing Administration, most commonly known as the FHA, provides insurance to FHA approved lenders. It is the largest Government backed insurer of mortgages in the world since it was founded in 1934.

FHA mortgage insurance provides FHA approved lenders protection from homeowners defaulting on their mortgage loans. The FHA will pay the lender a claim in the event of a homeowner’s default.

Next Steps

It's easy to qualify for a monthly tenure reverse mortgage. Borrowers need to meet a few basic requirements:

  • Aged 62 or older (at least one spouse)

  • Significant equity in a primary residence

  • Complete a HUD-approved financial counseling session, which may be done on the phone

  • A desire for financial flexibility and freedom throughout retirement

If you're interested in learning more about the tenure payment plan for reverse mortgages, visit our home page and fill out the loan officer contact form to speak directly with a Certified Reverse Mortgage Professional (CRMP). You can also reach us toll-free at 877-700-0942.