Answers to Common Reverse Mortgage Questions
Do I have to be a certain age to be eligible for a reverse mortgage?
Yes. All parties on title must be at least 62 years of age or older. The mortgage is based upon the youngest borrower’s age.
Will I still retain ownership and title of my home?
Yes. You retain title to your home during the period when you have a reverse mortgage, just as you would with a traditional home mortgage. However, you, as the homeowner, must continue paying property taxes and insurance, maintain the home in good condition, and reside in the home as your primary residence.
What types of homes are eligible?
Eligible homes include:
- Single-Family Homes
- 2-4 Unit Properties
- FHA Approved Condominiums
- Planned Unit Development
Property eligibility may vary based on the reverse mortgage product you choose. Contact our Reverse Mortgage Specialist at 888-602-6626 for complete details.
What are my payout options?
Depending on the product you choose, you can receive a lump sum, monthly payments, access to a line of credit, or a combination.
What are the fees or costs involved?
There are reverse mortgage fees and costs associated with the set up, however, these are typically paid using the loan proceeds at closing.
How will an adjustable rate affect my monthly payments?
Your monthly payment will be determined at closing, and an adjusting rate will not affect how much you receive each month.
Will the reverse mortgage affect my Social Security benefits?
Your Social Security benefits are generally not affected. However, you should always consult your attorney or accountant before deciding on a reverse mortgage.
What about Supplemental Security Income and state benefits such as Medicaid?
We always recommend you consult the administrator of these plans, your attorney, and/or your accountant before deciding on a reverse mortgage.
Do I still pay property taxes and insurance?
Yes! This is a must. You are responsible for and must continue to pay property taxes and homeowners insurance.
How do I receive my payments?
You can receive your payments via monthly check, or by automatic deposit into the account you choose.
Who arranges for the appraisal?
We will arrange for you to meet with an FHA-approved appraiser. Upon request, a copy of the appraisal will be included in your closing documents.
What if I decide to sell my home?
As with a traditional mortgage, if you choose to sell your home, the outstanding loan balance becomes due and payable. You or your estate will receive any proceeds exceeding the loan balance.
What happens to my spouse if I pass away first?
If your spouse is a co-borrower of the loan, he or she can continue to live in the home and continue to receive the existing benefits as long as the home is maintained and taxes and insurance are paid. Repayment would not be required at that time, unless your spouse is not a co-borrower on the loan, at which time the loan balance would be due.
If my home appreciates during the term of the mortgage, who would be entitled to that money?
Any money remaining after the mortgage is paid in full goes to you or, upon your death, to your heirs.
When do I repay the loan?
Your loan comes due when the last remaining borrower sells the property, permanently leaves the home, or passes away. In addition, borrowers must continue adherence to the program guidelines
Could I be forced to sell or vacate my home if the money I owe on the loan exceeds the value of my home?
No. As long as you continue to occupy the property as your primary residence, maintain your home in good condition, and continue to pay your taxes and insurance, you will not be forced to sell or vacate your home. Even if the total of the mortgage payments made to you, plus interest, exceed the value of the property. The required Mortgage Insurance Protection (MIP) premium and monthly set aside protects you should your property value experience a decline.
What if I move out temporarily, will the loan become due?
FHA’s policy states that if a borrower remains out of the home for 12 consecutive months, the loan would become due.
How much will I owe at the end of my loan?
All the money borrowed, including any money used to pay the loan?s closing costs, all accrued interest, financial and service fees and MIP required for HECM Reverse Mortgage loans.
What if I owe more money than the home is worth?
The HECM reverse mortgage is a “non-recourse loan”. This means that the borrower (or his or her estate) will never owe more than the loan balance or value of the property, whichever is less, and no assets other than the home can be used to repay the debt. This applies only when the borrower or estate chooses to sell the property to pay off the reverse mortgage loan. If the borrower or estate wishes to retain the property, the balance must be paid in full. If there is money left after the existing loan is paid, the borrower or their estate receive the money.
Will I still have an estate that I can leave to my heirs?
When you sell your home or no longer use it for your primary residence, you or your estate will repay the loan amount you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs.
How long do the heirs have to sell the property?
They have six months. HUD may grant an extension beyond that time as long as property taxes and insurance are paid and the home is maintained in good condition.
Note: There are default measures that would require your loan to become due. This information is clearly set forth in the loan documents you receive should you decide on a reverse mortgage