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Refinancing into The 62+ Loan™ could be your ticket to financial freedom during your retirement. Here's how it works.

Active adult homeowners know the importance of finding the right mortgage that fits their needs, budget, and lifestyle, especially when it comes to financial preparation for their retirement years. But for active adults and retirees who seek more financial freedom, economic security, and peace of mind, there might be a better option than a traditional mortgage: The 62+ Loan™.

The 62+ Loan™ refers to a loan program that can eliminate monthly mortgage payments for 62+ active adults, which can generate additional cash flow and sustain financial flexibility for years to come. Keep reading to learn more about how The 62+ Loan™ can support your active lifestyle and help you plan for financial success in retirement.

What Is The 62+ Loan™? 

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The 62+ Loan™ provides a range of benefits for retirees who need more financial freedom to support their active lifestyles.

The 62+ Loan™ is a home equity conversion mortgage (or HECM) created through a partnership between 55places Mortgage and Retirement Funding Solutions, a leading mortgage provider owned by Mutual of Omaha Bank. With The 62+ Loan™, homeowners can make a one-time down payment that eliminates the need to make any monthly mortgage payments. Without any more mortgage payments after the initial investment, the FHA-insured program gives homebuyers more money in their pockets and their bank accounts.

According to The 62+ Loan™ Home Refinance Guide, “the 62+ Loan™ converts a portion of your home equity into tax-free cash. You can establish a line of credit that grows larger over time, receive predictable monthly payments, or receive a lump sum.” As the guide explains, “there are no monthly mortgage payments required, although you are allowed to make payments if you so choose. You do not give up ownership of your home and you can still pass your home on to your heirs.”

Importantly, The 62+ Loan™ empowers retirees with financial freedom. Tane Cabe, the Vice President of 55places Mortgage, states:

“The most powerful thing about The 62+ Loan™ is it allows anyone who is retired, or getting close, to make memories and not mortgage payments. The vast majority of people want to eliminate the mortgage before retiring. Using The 62+ Loan™ can eliminate a mortgage payment while simultaneously providing reserve cash and income.”

Benefits of The 62+ Loan™

The 62+ Loan™ provides an advantageous mortgage option specifically designed to meet the needs of active adults and retirees. As such, The 62+ Loan™ provides a range of benefits for retirees who need more financial freedom to support their active lifestyles.

  • Larger Monthly Cash Flow

    One of the biggest benefits of The 62+ Loan™ is that it takes away the need for monthly mortgage payments. Active adults no longer need to pay their mortgage unless the loan defaults, which may happen from a failure to pay property taxes or homeowners insurance. Without these monthly mortgage payments, active adults may have a substantially larger monthly cash flow that they can spend as they choose. Additionally, the money provided by The 62+ Loan™ becomes a tax-free source of monthly income.

  • Retain Ownership

    Under The 62+ Loan™, active adult homeowners retain ownership of their homes indefinitely as long as they satisfy the basic obligations of the loan. These obligations include occupying the home as a primary residence, remaining current on property taxes and homeowners insurance, and continuing to pay home maintenance and any HOA fees.
  • Doesn't Affect Social Security or Medicare

    Notably, enrollment in The 62+ Loan™ doesn't affect Social Security or Medicare benefits. Retirees can continue to receive their same benefits when they refinance into The 62+ Loan™. However, because some loans may impact benefits or eligibility for certain government programs, such as Supplemental Security Income and Medicaid, active adults should speak with a mortgage advisor or financial professional for guidance.

How to Use The 62+ Loan™ 

With The 62+ Loan™, retirees have more financial freedom to pursue their own goals.

As explored above, the 62+ Loan™ offers a range of advantages and benefits for retirees who want to sustain their financial security throughout their retirement. Importantly, The 62+ Loan™ offers flexibility and freedom so active adults can use it to meet their own short- and long-term goals.

Retirees can use The 62+ Loan™, first and foremost, to supplement their monthly cash flow. The loan can provide another flexible source or monthly income outside of retirement accounts or other investments. The influx of additional tax-free cash can help active adults live more comfortably while they continue to prepare for their financial future. And without a monthly mortgage payment, active adults can do so much more with their money.

With The 62+ Loan™, active adults can also pay for home improvements or remodel their homes. The money can also help pay for credit cards, medical bills, and household expenses. It also becomes a “standby” line of credit for any significant future expenses that retirees may encounter. The 62+ Loan™ even provides an opportunity to buy a new car or pay for a dream vacation. With The 62+ Loan™, retirees have more financial freedom to pursue their own goals.

With these benefits and uses in mind, The 62+ Loan™ becomes an ideal mortgage option for many homebuyers. Homeowners who want to move to an active adult community or downsize into a low-maintenance home can benefit greatly from this loan. Those who want to move closer to friends and family can also do so, and retirees who want to travel the world and visit their dream vacation destinations can benefit from the financial freedom and lower cost of living offered by The 62+ Loan™.

How to Refinance Into The 62+ Loan™

Active adults who purchase a home and move into a new residence for their retirement can begin this new chapter with The 62+ Loan™. Homeowners can also refinance their home to qualify for The 62+ Loan™ at any stage of homeownership. Those who already have a mortgage can still qualify for The 62+ Loan™.

Retirees can use The 62+ Loan™ to pay off their existing mortgage when their home has sufficient equity. This eliminates any monthly mortgage payments for active adults. Then, any remaining funds from the line of credit can be disbursed to homeowners at a later time. Keep in mind that homeowners retain responsibility for paying property taxes, homeowners insurance, and any home maintenance or HOA costs, when applicable.

The 62+ Loan™ is a viable option for any active adults and retirees who qualify for the program. To qualify for The 62+ Loan™, at least one buyer must be 62 or older. The 62+ homeowners should also own and live in the home as their primary residence. Homeowners must also meet certain financial eligibility criteria and FHA requirements.

As The 62+ Loan™ Home Refinance Guide explains, “the United States Department of Housing and Urban Development (HUD) requires an assessment on each 62+ Loan™, and you'll need to receive consumer information from a third-party counseling source prior to obtaining the loan.” Overall, The 62+ Loan™ has few requirements, and an experienced 55places Mortgage Advisor assists all homeowners through this process. 

The 62+ Loan™ Resources 

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These resources can help you decide whether The 62+ Loan™ is right for you.

As The 62+ Loan™ reveals, many retirees can think of their home as a savings bank that can help fund their retirement. The 62+ Loan™ can enhance retirement for many active adults by providing increased financial freedom and security that comes from eliminating mortgage payments, generating additional cash flow, and taking advantage of the value you’ve built in your home.

For more information about The 62+ Loan™, take a closer look at The 62+ Loan™ Home Refinance Guide and The 62+ Loan™ Homebuyers Guide. These resources can help you explore another path to financial freedom and decide whether The 62+ Loan™ is right for you.