Reverse Mortgage Loans

A Reverse Mortgage loan can give you the ability to turn home equity into cash without having to sell your home. Whether you’re looking to pay off debt, travel the world, or have more cash for daily living expenses, a reverse mortgage may be for you.

reverse-mortgage

What is a Reverse Mortgage?

The U.S. Department of Housing and Development (HUD) created reverse mortgages to give older Americans a greater sense of financial security. A reverse mortgage is a specialized loan that enables senior homeowners (62 years or older) to convert home equity into tax-free income without having to sell the home, give up the title, or take on a new monthly mortgage payment.

How do I qualify?

  • You must be at least 62 years old. In the case of couples or co-owners, both must be 62 if their names appear on the title to the home.
  • You must have equity in your home. You may qualify even if you have an outstanding balance on your first mortgage.
  • Your home must be your primary residence.

Benefits of a Reverse Mortgage

  • Guaranteed monthly income for the rest of your life or one lump sum distribution
  • Income tax-free and does not affect Social Security
  • Reverse Mortgages are HUD regulated
  • Can be used to replace the reduction in Social Security which occurs with the passing of a spouse
  • No repayment of the loan as long as you live in your home
  • You retain 100% ownership of your home
  • There are no restrictions on how you should use the funds

When do I need to repay the loan?

You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than your home’s value. Once you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home belongs to you or to your heirs. The debt will never be passed along to the estate or heirs.

Frequently Asked Questions

  1. Will I still own my home?
    • Yes, you retain the title to your home which passes on to your heirs.
  2. Will this affect my Social Security Income?
    • No, a Reverse Mortgage is considered a loan, not income.
  3. If the loan exceeds the value of my home, are my heirs held responsible after my death?
    • No, you never owe more on your home than it is worth.
  4. Can I make payments on my Reverse Mortgage?
    • Yes, but you are not required to do so.
  5. What if something should happen to the lender?
    • If the lender defaults on the loan for any reason, the Government will insure the loan.
  6. Are there any income or credit requirements?
    • There are no income or credit requirements to receive a Reverse Mortgage.

Materials and content within this document are not from or approved by HUD or FHA.

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