A reverse mortgage loan allows someone, at least 62 years old, to access some of their home equity without incurring a monthly repayment, for as long as they live in their home. All unpaid interest accrues and property taxes and home insurance must still be paid, along with maintaining the property. The loan is not repaid until the borrower no longer occupies their home as a primary residence, or fails to comply with loan terms. At that time, the borrowed funds, plus accrued interest, is repaid, while the remaining equity is left to the owners. To qualify, they must own and live in, a property as their primary residence. To qualify as your primary residence, you must live in the property for at least 5 months and one day per calendar year. There are no income, or asset requirements, however there may be some credit requirements. The lender must evaluate the HECM borrower’s willingness and capacity to meet his or her financial obligations and to comply with the terms of the mortgage. The proceeds from a reverse mortgage are tax-free and available; as a lump sum, monthly payments, a line of credit; or any combination.
The loan amount that someone will initially qualify depends on the youngest borrower's age, the reverse mortgage product chosen, the value of the home (within limits), and current interest rates. Basically, the older someone is and the higher the home value, the larger the reverse mortgage. The reverse mortgage must first refinance all outstanding liens against the property before additional funds can be withdrawn.
Closing costs are financed within the mortgage balance.
A credit counseling session with a HUD-approved counselor is required for anyone applying for a reverse mortgage.
If you are interested in a Reverse Mortgages please fill out our web form below.
Top 5 Misconceptions
About A Reverse Mortgage
In the minds of many senior homeowners today, there still remain misunderstandings and continued misgivings surrounding reverse mortgage loan programs. The Department of Housing and Urban Development (HUD) who oversees the Federal Housing Administration (FHA) who insures all lenders of Reverse Mortgage Loans has recently enacted guidelines on all Reverse Mortgages making the product safer and more secure than ever before.