Reverse Mortgages

A reverse mortgage is a home loan for seniors age 62 or older. Instead of making monthly mortgage payments like a traditional home loan, Reverse Mortgage are
paid back in one lump sum when the borrower either moves, sells the home, or passes away. Income, assets, monthly living expenses and credit history may be verified.

Frequently Asked Questions about Reverse Mortgages

Does the bank own my home?

No, the bank does not own your home. The borrower continues to retain title and ownership. The bank is not on the title.

Can I get a Reverse Mortgage even if I currently have a mortgage?

Yes, you can get a reverse mortgage even if you currently have a mortgage. The first thing that will be paid off is your current mortgage and any other liens against the property. As long as you have enough equity to do this, a Reverse Mortgage would work for you.

Will a Reverse Mortgage cause me to pass debt on to my heirs?

No, a reverse mortgage will not cause you to pass debt on to your heirs. A Reverse Mortgage is a non-recourse loan. There is mortgage insurance, which is a Federal requirement, and will pay off the difference from the value of your home to what you owe. No one comes out of a Reverse Mortgage owing more than the value of their home. If the value of the home is greater than what is owed, the heirs inherit the additional money after the loan is paid.

Is a Reverse Mortgage risky?

A reverse mortgage is, in-fact, less risky than a conventional mortgage. It is one of the safest loans available in the mortgage industry. Numerous safeguards have been built into the program, including mandatory HUD-approved counseling, payment guarantees, capped interest rates, advanced disclosures, a three-day rescission period and a non-resource limit.

Must a senior be in good health to qualify?

No. This program is not based on a senior homeowner’s health. To date, there is no employment or health requirements.

Is a Reverse Mortgage expensive?

No, a reverse mortgage is not expensive. There are little (often zero) out-of-pocket expenses passed onto the homeowner as most of the closing costs are rolled into the loan. A Reverse Mortgage will cost more than a traditional loan, however, the closing costs are HUD and FHA protected for the borrower.  All costs are to get the loan processed and to ultimately protect the borrower and their heirs, as well as the bank.

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