What types of homes are eligible for reverse mortgage financing?
To qualify for a reverse mortgage, the home must be your primary residence. 1-4 family residences, condos, and manufactured homes are all eligible, but vacation homes, secondary residences and rental properties are not currently eligible.
How much do I pay back at the end of the loan?
At the end of the loan, you would pay back the total of your initial draws and any subsequent draws, plus all interest and fees accrued during the life of the loan.
Do I still own my home?
Yes. Just like all other traditional loans, you still own your home, and have complete control over it. The reverse mortgage is only a lien on the home.
What happens to my home if I die?
At the time the last surviving borrower dies, the reverse mortgage must be paid in full with all interest and fees. This can be done by the heirs selling the home or paying off the reverse mortgage with cash or new financing.
If I die and my heirs wish to sell the home to pay off the reverse mortgage how much time will they have to do so?
If your heirs cannot afford to pay off the reverse mortgage without selling the home, HUD will give at least 6 months for the sale, and extensions can be granted in certain circumstances.
How do I know how much I owe during the term of the loan?
Each month you will receive a monthly statement which will give you the status of your account including such things as your outstanding loan balance, periodic interest charges and fees, and other pertinent information.
If I choose a credit line, how do I request funds when I need them?
Line of credit draws are typically done by mailing or by faxing a request form signed by the borrowers. The funds are commonly wired to the borrowers account within 3-5 days. For emergencies, there are expedited methods. Talk with your reverse mortgage servicer.
If interest keeps accruing on my reverse mortgage over time, doesn’t it become very expensive?
It depends on how you look at it. A reverse mortgage has no monthly payments, so as interest and fees accrue, your loan balance goes up over time, and your savings account stays the same. With a traditional loan, your loan balance would not go up, but you would be making monthly payments, so your savings account would be going down over time.
If my spouse is not 62 years old yet, can we qualify jointly for a reverse mortgage?
No. All borrowers must be at least 62 years old at the time of closing. However, in certain circumstances under new HUD rules, spouses who are not yet 62 may still have rights to stay in the home for their lifetimes even if the borrower spouse passes away or leaves the home. Contact your Reverse Mortgage Specialist for more details about your specific situation.