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NMLS#: 53185

Reverse Mortgage FAQ

Reverse Mortgage FAQ

Reverse Mortgage FAQ

Question & Answer

Q: What is a reverse mortgage?

A: A reverse mortgage allows you to borrow against the equity you‚Äôve established in your home.¬† To be eligible, you must be age 62 or older and have enough equity in¬†your home to qualify based on your entitlement.¬† Instead of making payments, you can choose to receive them.¬† That‚Äôs the ‚Äúreverse‚ÄĚ part of a reverse mortgage.

Q:  How much money will be owed when the loan has to be repaid?

A:  The total amount borrowed which includes any accumulated interest, mortgage insurance premiums, financed origination fees and closing costs will be owed. Due to reverse mortgages being a non-recourse loan, you nor any heirs will never owe more than the home appraisal value at the time of repayment. 

Q:  How much can I borrow?

A:  In most cases, maximum reverse mortgage loan amounts are based on the following factors;

  • The age of the youngest homeowner
  • The appraised value of the home
  • The current interest rate
  • The locally established lending limit

Q:  Are there any restrictions on what I can do with the proceeds from a Reverse Mortgage?

A:  You can use the proceeds from the loan for whatever you need, their are no restrictions on the use of the proceeds. 

Q:  When does the loan have to be repaid?

A:  When the home owner sells the property or all borrowers on title passes away, the loan must be repaid. Also if you no longer live in your home as a primary residence or leave the home for more than 12 consecutive the property no longer qualifies and the loan will need to be repaid.

Q: How much does a reverse mortgage cost?

A: Costs can vary from one program to another, we offer a variety of programs that meet a variety of needs. There are no hidden fees, all costs are disclosed to you up front.  Like traditional loans, reverse mortgages have programs that offer lender credits to offset standard closing costs.

      • Most fees can be financed into the loan
      • Loan origination fees ‚Äď capped by HUD
      • FHA mortgage insurance premium

Q:  Is it required that borrower receive counseling before getting a reverse mortgage?

A:  Yes, counseling is required to protect borrowers from receiving incorrect information from a lender or broker about reverse mortgages. Counselors will review loan programs, costs and any alternative solutions that may be available to you.

Q:  My property is held in a Living Trust.  Do I qualify?

A:  Yes, as long as you are the primary trustee and are qualified by age.

Q:  Will I still have an estate that I can leave to my heirs?

A:  Any remaining home equity belongs to you and your heirs.  None of your other assets will be affected by the reverse mortgage. Your heirs will be able to choose whether to keep or sell the home. If they decided to keep it, they must pay the balance due on the reverse mortgage. Otherwise, they may sell the home and use the proceeds to pay off the remaining mortgage. They get to keep any excess proceeds from the sale of the house.

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