Who are Reverse Mortgages designed for?
They are designed for homeowners at least 62 years of age with moderate to significant equity in their homes.
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If I have a mortgage on my home can I still qualify for a Reverse Mortgage?
Yes, but any existing mortgages must be paid off at closing.
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What type of home will not qualify for a Reverse Mortgage?
Vacation homes or other secondary residences, mobile or manufactured homes not attached to a permanent foundation, rental properties of more than four units and homes on leased lands do not qualify.
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Will I have to pay any taxes on the Reverse Mortgage proceeds?
Currently the IRS treats monies received from a Reverse Mortgage to be loan advances and not taxable income. For your specific situation, we recommend that you consult your tax advisor.
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What if my home is in a "living trust"?
A homeowner who has put the home in a living trust can usually take out a Reverse Mortgage, subject to review of the trust documents.
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Does the money from a Reverse Mortgage affect Social Security, Medicare or pension benefits?
The proceeds from a Reverse Mortgage do not affect these benefits. We recommend that you consult your financial advisor.
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Can the interest charged on my loan principal be deducted for tax purposes?
The interest accrues and is deductible when the loan balance and interest is repaid, when the borrower permanently leaves the property. We recommend that you consult a tax advisor.
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Will a Reverse Mortgage affect my SSI or Medicaid?
No, A Reverse Mortgage will not affect these or most other means tested benefits as long as the monthly cash advances are fully spent every month and not accumulated. Programs do vary by state so it's advisable to check with the local area agency on aging.
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What are the upfront costs associated with a Reverse Mortgage?
The borrower will pay an origination fee, and actual closing costs, including charges by the title and escrow companies. All of these costs can be financed as a part of the initial loan advance.
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What is due when the loan is repaid?
The borrower will pay back the cash advances they have received plus the accumulated interest and any upfront costs that were financed initially.
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Will I ever owe more than what my home is worth?
All Reverse Mortgages are "non-recourse" loans, which means that the borrower can never owe more than the value of the home regardless of loan balance.
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Do I lose my home to the lender when I pass?
No, this is a misconception; a Reverse Mortgage is a loan against the property. The title remains in the name of the borrower(s) and the lender is only repaid the balance owed or home value; whichever is less.
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What are my responsibilities with a Reverse Mortgage since there are no payments to make?
You are required to pay your property taxes, keep a current property insurance in place, maintain the home and notify the lender if you will be away from the property for an extended period of time.
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When does the loan become due and payable?
The loan is due and payable when the last remaining borrower sells the property, permanently leaves the home, or passes away. Until these events take place you live in the home and make no payments to the lender.
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Do I or my heirs have to sell the property to repay the loan?
No, repayment can be made by refinancing the existing Reverse Mortgage with a conventional mortgage loan.
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How does a Reverse Mortgage compare to a traditional home equity line of credit?
Both products allow you to turn the equity in your home into accessible proceeds.  But, unlike a traditional home equity line of credit, a reverse mortgage does not require that you have existing income in order to qualify, since it is designed to supplement your income. And, unlike a home equity line of credit, with a reverse mortgage, you make no monthly payments and can have no out-of-pocket expenses. *

*The only exception is that you may need to pay for your home appraisal in advance if your home value cannot be verified/substantiated.
 
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