Reverse Mortgages

What are some common concerns about reverse mortgages?

• If I get a reverse mortgage will I lose the title of my home?

  No. When you take out a reverse mortgage the title of your home remains with you and/or your estate.

• If I get a reverse mortgage will it affect my social security benefits?

No. A reverse mortgage will not affect your social security benefits.

• If I get a reverse mortgage could I owe more than the house is worth?
  

No. You will never owe more than the value of the home.

What are the benefits?

• You will never have to make a mortgage payment while still in the home.
• The money may be used for retirement planning, home repair, health care, health or long term care insurance, purchasing a new car or a second home, travel, gifts, endowments, or monthly income.
• Loan proceeds are not considered income and will not affect Social Security, Medicare, SSI, or Medicaid benefits. Eligibility for certain local entitlement programs may be affected if you decide to keep proceeds in a personal asset account (checking, savings, etc.).

Who is eligible?

• At least one borrower must be 62+ years of age. Ask our Mortgage Consultants about particulars. Must have completed required counseling prior to application.
• For jointly –owned property all borrowers must be at least 62.
• No health requirements.
• Income, credit, and assets will be reviewed to determine eligibility.

How much can I borrow?

• The amount is based on a federal Housing Urban Development (HUD) formula that factors in the youngest homeowner’s age, appraised value in relation to HUD county guidelines, and current interest rates.
• The initial amount borrowed can never exceed the value of the home and could be limited in the first year by government regulation.

How can I receive my tax-free money?

• Lump-sum distribution.
• Fixed monthly dollar amount for a term you specify.
• Lifetime monthly distribution (tenure payment).
• Easily accessible lines of credit which based on the unused portion will increase over time.
• Combination of any of the above options such as a lump sum for home repairs, then monthly disbursements.

When is the loan due?

• When you sell your property, just as any other lien.
• When the property is no longer occupied by at least one borrower as the primary residence. Beginning with loans originated on Aug. 4 2014, a non-borrowing spouse will no longer automatically be required to pay back a government-insured reverse mortgage when the person listed on the loan dies or leaves the property.

How much does it cost?

• As with any mortgage, a reverse mortgage has closing costs such as title insurance, attorney fees and an origination fee. A reverse mortgage also requires a mortgage insurance premium. Most of these costs can be financed in the loan amount so there are minimal out-of-pocket expenses at time of application.
• You are responsible for general upkeep including utilities and taxes.