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Will we continue to own our home?
Yes, you will own your home just as you do now. The bank does not take ownership. The owner retains title with a reverse
mortgage.
How do I qualify for a Reverse Mortgage?
To become eligible for a reverse mortgage, you must be at least 62 years old and own your home. You must have enough equity
in the house to pay off outstanding mortgage balances. Your home is also required to be occupied by you as your principal
residence.
How much money can I get?
The amount of money that a lender will loan depends upon how old you are at the time of closing, how much your house is
worth, the total amount of liens, and interest rates. The type of reverse mortgage product and the payment options can also
affect the amount of money you will receive.
How do I receive my money?
There are several different options to choose from. You can take the money in a lump sum, set up a line of credit, monthly
payment, or a combination of all three.
What costs are associated with a reverse mortgage?
The costs of a “forward” loan are very similar to a reverse loan. For example, there is an origination fee, an MIP (mortgage
insurance premium) is paid HUD on the HECM loans, an appraisal fee, a flood certification fee, title and escrow fees, and
other standard closing costs.
Is it required that I receive counseling before getting a reverse mortgage?
Yes. Counseling is required to protect seniors from receiving incorrect information about reverse mortgages. The lender
must be in receipt of the counseling certificate before they can close the loan. To locate a reverse mortgage counselor near
you, contact your loan officer or your local HUD office.
Do I get taxed on the money I receive from my reverse mortgage?
The equity in your home is considered your money and not additional income. All the funds from a reverse mortgage are tax
free.
What can I use the money for?
Anything you wish. Common uses of loan proceeds are:
- Extra monthly income
- Pay off debt and or taxes
- Healthcare
- Home repair or remodeling
- Travel
- New car
- Help family with education or to purchase a home
I’ve always planned to leave the house to the kids. Won’t you be taking my house?
No, your home will always remain your home, you may leave it to whomever you choose. When you pass away, your heirs will
have several options for paying off the loan, including selling your home or refinancing the debt, among others. After the
debt is repaid, the remaining equity goes to your heirs.
What are my responsibilities as a home owner with a reverse mortgage?
Homeowners with a reverse mortgage have responsibilities similar to those associated with a conventional mortgage. They are
expected to pay property taxes, keep current property insurance and maintain the home.
What about a home in a ‘living trust’?
Yes, a homeowner who has put the home in a living trust can usually take advantage of a Reverse Mortgage. Trusts must be
approved by the Title company and some trusts may need minor amendments.
What if I have an existing mortgage?
We can still do a reverse mortgage providing there is enough loan proceeds to pay off your existing mortgage. A reverse
mortgage must be in first lien position. This will eliminate any mortgage payments you had.
Does a Reverse Mortgage affect Social Security, Medicare, or pension benefits?
No, these benefits are not affected.
Will my spouse continue to receive the same amount of benefits if I die?
Yes, as long as you are joint borrowers, and your spouse continues to live in the home.
Will I have any up front closing costs in getting my loan?
There will be standard mortgage processing costs, a mortgage insurance premium for the Federally Insured FHA/HUD Home Equity
Conversion Mortgage program and a loan origination fee. All fees can be financed as part of the loan, meaning no out of
pocket expenses to you.
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