FAQs

Americans are living longer than ever and many are not prepared for the costs that come along with living longer. If you are 62 or older and have sufficient equity in your home, you can convert the equity into funds to use to pay for anything from long-term care costs or debt to home renovations to make aging in place more accessible.

To qualify for a reverse mortgage, you must be 62 or older, have no mortgage balance or have a mortgage balance that can be paid off with proceeds from the loan. In the case of a purchase reverse mortgage, you must have sufficient down payment to meet the equity requirements for your age. You must live in the home as your primary residence. You must go through a financial assessment that helps determine you are financially stable enough to pay for property charges like taxes. Additionally, you must complete reverse mortgage counseling from a HECM counselor before you are approved for the loan.

In addition to the above, you may be eligible tor for one of the industry’s proprietary reverse mortgage products with the age requirement is 55. Contact us to find out more.

You must live in either a single-family home or a two to four-unit home, one unit of which you are living in. There are some circumstances where the Department of Housing and Urban Development (HUD) will approve some condominiums and manufactured homes for a reverse mortgage, if they meet FHA requirements. Contact us to find out more.

A home equity line of credit (HELOC) can be frozen or changed at the lender’s discretion, but if you have an adjustable-rate HECM and choose the line of credit option, you will never have that taken away as long as you adhere to the terms of the loan.

Yes, the home equity conversion mortgage (HECM) reverse mortgage is insured by the FHA – Federal Housing Administration.  Like any other financial product, it is important that you understand the product for your unique situation. That is why we offer assistance in understanding a reverse mortgage so that you or your family members can make the right and informed decision.

No, you will still be the sole owner of your home. The bank will not own your home when you take out a reverse mortgage.  This is like any other mortgage as it only creates a lien on the property and does not transfer ownership.

Nothing, the loan does not become due and payable until the last borrower permanently leaves the property. When this occurs, you or your heirs will have the option of selling the home or giving the property back to the bank. If there is equity, it is best for the property to be sold. If the balance of the loan is more than the value of the house, then it can be given back to the bank with no recourse to you or your heirs.

No.  The funds can be used without restriction.  However there is one restriction. In some cases the borrower may be required to set aside funds for taxes and insurance.

The estate does inherit the home, but there will be a lien on the title. If your heirs wish to retain the property, then the full amount of the loan must be paid regardless of property value. The amount due at loan maturity is the principal borrowed plus any accrued interest and mortgage insurance premium.

For example, if someone with a $250,000 home passes away and leaves a reverse mortgage loan balance of $80,000, then the estate would sell the home for $250,000, repay $80,000 to the bank, and keep the $170,000 difference.

As a non-recourse loan, lenders can only look to the value of the home for repayment; no other assets may be attached if the loan balance grows beyond the mortgaged home value.  You or your heirs will not be required to pay more than the value of your home at the time the loan is repaid; even if your loan balance exceeds the value of your home provided you or your heirs decide to sell the home.