FAQ on Reverse Mortgages
Reverse Mortgages
What is a reverse mortgage?
A reverse mortgage lets you get money from your home equity. This money is paid to you in the form of a home loan.
How is it different from a home equity loan?
Unlike a home equity loan, a reverse mortgage doesn’t require monthly payments. Instead, a reverse mortgage pays you. Even better—your credit doesn’t count against you. However, a reverse mortgage does require you to pay real estate taxes, utilities, and hazard and flood insurance.
Who can get a reverse mortgage?
United States citizens aged 62 or older can qualify for reverse mortgages. These citizens must occupy their property as their principal residence. There are no income or credit requirements. Applicants must take FHA (Federal housing administration) approved counseling, however.
What properties qualify?
Most 1 to 4 family dwellings, FHA approved condominiums, and PUDs (planned unit developments) will qualify for reverse mortgages.
How much can I borrow?
This will depend on a variety of factors, including: your age, your current interest rate, the appraised value of your property, and which payment option you choose.
What is the cost?
Exact costs will vary, but you can expect to pay for mortgage insurance, an origination fee, title insurance, recording fees, real estate appraisal, survey (if needed), and monthly service charges. Interest rates tend to be low, but start up costs are usually high.
When is the loan due?
The loan isn’t due until the borrower sells the property, moves to a different property, or passes away.