Frequently Asked Questions
In order to provide you with the most information possible, we have created a page answering frequently asked questions related to reverse mortgages.
A reverse mortgage is a type of loan that converts your home’s equity into usable funds. This type of financing is available to homeowners 62 years of age and above who own the home in which they live.
A HECM is a type of reverse mortgage insured by the federal government. This insurance serves as a protection that you can never outlive your reverse mortgage and you can never owe more than the fair market value of your home. Because this type of reverse mortgage is regulated, the fees are limited and you are required to obtain counseling with a third party HUD-approved counselor.
In order to see how much you can receive, you must either use a reverse mortgage calculator or speak with a specialist. A calculator can give you a rough estimate, but nothing can substitute speaking with a licensed, experienced professional. Remember, you should never pay for reverse mortgage information.
If there are funds left after paying off any current liens on the property, those are yours to do with as you please. There are absolutely no restrictions on how your money may be spent.
A reverse mortgage does not affect entitlement benefits like Social Security and Medicare. If you receive need-based benefits like Supplemental Security Income and Medicaid, it is possible that the funds from a reverse mortgage could affect these benefits. Speak with your case worker to determine if yours will be affected.
In order to be eligible for a reverse mortgage, all homeowners on title must be 62 years of age and must live in their home as their primary residence. Because of the unique nature of this financial product, it does not have traditional income or credit qualifications.
In order for your property to be eligible for a federally-insured reverse mortgage, it must comply with all guidelines set forth by the FHA. This includes 1-4 unit homes, manufactured homes constructed after 1976, and FHA-Approved condos.
This program, first introduced in October of 2008 allows prospective homebuyers to purchase a new home without acquiring new monthly mortgage payments.
Yes, a reverse mortgage can either be refinanced to take advantage of more equity or lower interest rates, or can be refinanced into a traditional loan.
No! You maintain title to your home with a reverse mortgage. As a homeowner, you continue to have the same responsibilities as you would without this financial prodcut. This means your homeowner’s insurance, real estate taxes, and home maintainance must remain current.
One difference between this financial product and a traditional loan is that counseling with a HUD-approved counselor is required. This is a requirement in order to ensure that all people on title to the home understand the contract into which they are entering.