| How Reverse Mortgages Work?
Reverse Mortgage loans typically require no repayment for as long as you live in your home. A Reverse Mortgage must be repaid in full including interest and financed closing costs when the last living borrower permanently vacates or sells the property. Because the borrower(s) make no monthly payments the amount you owe grows larger over time. As your debt grows larger, the amount of equity you would have left after selling and paying off the loan generally grows smaller. YOU WILL NEVER OWE MORE THAN YOUR HOME'S VALUE at the time loan is paid. Reverse Mortgage borrower(s) continue to own their homes, so you are still responsible for property taxes, insurance and repairs. If you fail to carry out these responsibilities, your loan could become due and payable in full.
What is a Reverse Mortgage?
A Reverse Mortgage is a special type of home loan that enables a senior homeowner 62 years of age or older to access a portion of their equity tax-free based on their age, home value and the current interest rate. Unlike traditional home loans, or second mortgages, no repayment is required until the homeowner(s) no longer occupy the property as their primary residence.
Who's eligible for a Reverse Mortgage?
All owners of the home must apply for the Reverse Mortgage and sign the loan papers. All borrower(s) must be 62 years of age, occupy the home as their primary residence majority of the year and own the home outright or with a relatively low mortgage balance that must be paid off through the proceeds of the Reverse Mortgage. The homeowner(s) must also attend a free HUD Counseling Session either face to face or by telephone, whichever is more convenient for the borrower(s).
Reverse Mortgage Property Eligibility?
- Single Family One-Unit dwellings are eligible properties
- 2-4 Unit Owner Occupied dwellings
- Some Condominiums and Planned Unit Developments (please contact the lender for specifications)
- Some Manufactured Homes
COOPERATIVES ARE GENERALLY NOT ELIGIBLE FOR A REVERSE MORTGAGE. |