Frequently Asked Reverse Mortgage Questions

I have heard of reverse mortgages, but what exactly are they?

A reverse mortgage is a special type of loan using the equity in your home as collateral. With a reverse mortgage, you do not have to repay the loan for as long as you live in the home. You will also never owe more than your home is worth and most importantly, payments from a reverse mortgage are guaranteed by the US governmnet.

No payments at all? It sounds too good to be true.

It is true. That is the key feature of a reverse mortgage. With a reverse mortgage, you will never have another mortgage payment. Instead you can get cash, a monthly payment to you, or a line of credit. You can also use a reverse mortgage to pay your property taxes and homeowner’s insurance premiums. But don't just take our word for it, read what AARP and Fannie Mae have to say about Reverse Mortgages.

How do I qualify?

To qualify, you and any co-borrower must be at least 62 years of age and own a home. This home must also be your primary residence. The best part of the program is there are no income or credit requirements to satisfy.

What types of reverse mortgage programs are available?

There are several reverse mortgage programs available, including the FHA-insured "Home Equity Conversion Mortgage (HECM)" and the Fannie Mae "Home Keeper."

How much money can I qualify for?

How much money you can receive is based upon the age and number of borrowers, the value of the house, current interest rates, the maximum loan amount and the program you select. It sounds complicated, but the mortgage experts can calculate this for when you call.

Are there any costs associated with a reverse mortgage?

Closing costs and fees will be incurred when you obtain a reverse mortgage. Closing costs include the appraisal, title insurance, origination fee and recording fees. These items can be included in your loan so you do not have to pay cash for them. We will provide you with a Good Faith Estimate of closing costs at the time of application.

When must my reverse mortgage be repaid?

Your reverse mortgage must be repaid when you either sell your home or permanently move out. In the event of death, your heirs will have the choice of keeping the house and repaying the loan, refinancing to another mortgage, or selling the house and using the proceeds to repay the loan.

How will this affect my taxes and Social Security?

Payments received from a reverse mortgage are considered to be a loan, not income. Therefore, funds received are NOT subject to income tax and do not affect Social Security Benefits. Those receiving Medicaid or SSI may not be affected if the funds from the reverse are spent in the month they are received. We recommend, however, that you consult your own tax advisor for further details.

How do I receive my money?

There are several options available for receiving your equity:

• Lump sum at closing
• Monthly payments for as long as you live in your home
• Monthly payments for a fixed number of years
• A line of credit you can draw upon as you need
• Or, a combination of these options that best meet your needs

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