Reverse Mortgage Information
Reverse Mortgage Programs| The Reverse Mortgage Process
Frequently Asked Questions
- What is a Reverse Mortgage?
- How do I qualify for a Reverse Mortgage?
- How much money can I receive?
- How do I receive the money?
- How is interest charged on a Reverse Mortgage?
- What costs are involved with a Reverse Mortgage?
- When does the Reverse Mortgage need to be repaid?
- Do I still own my home?
What is a Reverse Mortgage? | BACK |
A reverse mortgage is a home equity loan that does not require payments. There is only one payment due when the homeowner(s) no longer occupy the home. Reverse mortgages are backed by the U.S Government or major financial institutions.
How do I qualify for a Reverse Mortgage?| BACK |
A reverse mortgage is easy to obtain, provided that:
1. You are at least 62 years of age or older.
2. Your home is or is to be occupied as your primary residence.
3. You have substantial equity in your home.What can I do with the money? | BACK |
You can use the money you receive from your reverse mortgage in any way you choose:
• Supplement your income
• Home improvements
• Pay off a current mortgage - No More Payments!!!
• Medical expenses
• Pay off debt
• Buy a new car
• Travel
• College tuition or gifts to familyHow much money can I receive? | BACK |
The amount of money you can receive from a reverse mortgage is determined by your home value, the number and age of the homeowner(s) and the current interest rate. We will assist you in evaluating your options and calculate the maximum amount of money that will be available to you.
How do I receive the money? | BACK |
With a reverse mortgage, you have five payment plan options to choose from:
1. Tenure Option: Receive equal monthly payments for as long as you occupy your home as your principal residence.
2. Line of Credit: Draw cash from your reverse mortgage whenever and in whatever amount you choose, up to the available limit. Interest is only charged after money is accessed.
3. Lump Sum Cash Advance: You can receive all or part of your money in a lump sum upon the closing of your reverse mortgage.
4. Modified Tenure: Set aside a portion of the loan proceeds as a line of credit, in addition to monthly payments.
5. Term: Receive equal monthly payments for a fixed period of time that you select, for example 5 or 10 years.The payment plan can be changed for a small fee.
How is interest charged on a Reverse Mortgage? BACK
The interest options on a reverse mortgage include adjustable and fixed rates. The adjustable rates are tied to common market indicies. Interest is based on your loan balance, which consists of the cash you have received and the financial closing costs. If you select a line of credit, interest is not charged until you use the money. The unused line of credit increases over time. The rate of increase varies depending on the program selected.
What costs are involved with a Reverse Mortgage? | BACK |
The costs vary depending on the program selected. Some options carry no closing costs. If fees are charged, they can be financed into the loan. Fees may include the cost of the appraisal, title insurance, loan origination, escrow and recording fees and mortgage insurance with the FHA insured program. All reverse mortgages have monthly servicing fees typically $35 per month added to the loan balance.
We will be happy to provide you with a good faith estimate of the costs involved.
When does the Reverse Mortgage need to be repaid? | BACK |
The reverse mortgage becomes due and payable when you or your spouse permanently leave the home - i.e move, sell or pass away.
Reverse mortgages are typically repaid from the proceeds of the sale of the home, with any remaining equity staying with the homeowner or their heirs. If a spouse passes away, the surviving spouse continues to receive the full benefits of the reverse mortgage, with no repayment until they decide to permanently leave the home.
Do I still own my home? | BACK |
Absolutely.
You retain full ownership of your home when you obtain a reverse mortgage. As with any mortgage, the lender has a lien against your property. Since you make no monthly payments the loan balance increases over time. When the loan is repaid the borrower or their heirs pay off the loan balance, which consists of the financed closing costs, the cash advanced from the reverse mortgage and the interest that has accrued. You benefit from the appreciation and the remaining equity stays with you or your heirs.
What is a Counseling Certificate? | BACK |
To qualify for the Reverse Mortgage you are required to meet with an
independent reverse mortgage counselor. This free counseling session will help you determine whether a reverse mortgage is right for you. The counseling session can be done either in person or on the telephone, and family or trusted friends are encouraged to participate. At the end of the meeting you will receive a Certificate of Borrower Counseling.
Please call 1-800-489-0986 or see the HUD site for a list of qualified counselors in your area.
