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Reverse Mortgages

Answers for Senior Homeowners

Reverse

Is a reverse mortgage right for me?

If you are over the age of 62 and own your own home, a reverse mortgage might be the perfect solution. You can use the equity you've accumulated in your home over the years to improve your quality of life and ease any financial concerns you might have.

How is a reverse mortgage different from a traditional loan?

One of the major differences is a reverse mortgage does not require a monthly payment. To qualify for a traditional mortgage or a home equity line of credit, you must have sufficient income and acceptable credit to be approved for the loan. To qualify for a reverse mortgage there are no income or credit qualifications. Your eligibility is based upon your age. The loan amount you qualify for must be sufficient to satisfy any existing loans secured against your home.

If there are no monthly payments, what are my responsibilities?

You are required to pay your property taxes and homeowners insurance.

If I have an existing mortgage will I still qualify?

Yes, but any existing mortgages must be paid off at closing. The proceeds from the reverse mortgage may be used for that purpose first.

How much money can I get from a reverse mortgage?

The amount you may qualify for depends upon the product, your age, the current interest rate, appraised value of your home and FHA's mortgage limit for your area (if applicable).

What are the upfront costs associated with a reverse mortgage?

You will pay many of the same fees as if you were buying a home. All of the costs may be financed.

When must the reverse mortgage loan balance be paid in full?

The loan is satisfied when the last borrower passes away, the property is sold or is no longer the borrowers primary residence.

What if my loan balance is greater than my home is worth?

All reverse mortgages are non-recourse loans, which means that you can never owe more than what your home is worth regardless of the loan balance.

Do my heirs or I have to sell the property to repay the loan?

No, refinancing or other assets can accomplish repayment.

Can my home be taken away if I outlive the loan?

No, nor is the loan due. You are not required to repay the loan as long as one of the borrowers remains in the property and pays the taxes and insurance.

Are there various types of reverse mortgages?

Yes, there are approximately three different reverse mortgage products available.

Can I refinance an existing reverse mortgage?

Yes, and your closing costs may be dramatically reduced.

My home is in a living trust can I take out a reverse mortgage without taking the property out of the trust?

Yes, the title to your property may remain as is. However, the trust does have to be reviewed to ensure you are the beneficiary of the trust and the trust is irrevocable.

Are there any tax liabilities from the proceeds of a reverse mortgage?

Currently the Internal Revenue Service does not consider proceeds from a reverse mortgage taxable income.

Can the interest charged on my loan principal be deducted for tax purposes?

The interest accrues and is only deductible when the reverse mortgage loan balance is paid in full.

To find out how much tax-free* cash may be available to you, please contact a Reverse Mortgage Specialist or visit one of our convenient locations. We look forward to assisting you!

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