A: Each month, the interest is added to your loan balance. You only repay the loan when you sell the house or when the loan becomes due (such as after you pass away).

A: A reverse mortgage is a program designed for homeowners ages typically 62 and older, however new reverse mortgage programs allow for ages of 55+. This nationwide program allows homeowners to turn a portion of their home’s equity into usable cash without the need for a monthly mortgage payment. Qualification is determined by age and equity position. The homeowner must continue to occupy the property as their primary residence and stay current with homeowners insurance, property tax payments and any HOA payments if applicable.

A: No, unlike equity share programs with a reverse mortgage the bank does not take owner interest in your home. Similar to a standard “forward” mortgage, the property is held as collateral with a lien on title however there are no mandatory monthly payments. Every month you will receive a mortgage statement and you have the option to make a payment, review your line of credit or simply not make a payment.

A: Qualification for a Reverse Mortgage is based on the appraised value of your primary residence and age of the youngest spouse or borrower. General rule is that at least 50% equity is required to qualify, however each scenario is different so Contact us today to find out how much you might qualify for. 

A: The events that cause the reverse mortgage to be repaid are:

– Selling the property
– Refinancing the property
– Not occupying the primary residence for 12 months or longer
– Not keeping homeowners insurance, property taxes or HOA current
– Upon passing of the last surviving borrower of the reverse mortgage

The estate or heirs will have 6 months to refinance to pay back the reverse mortgage or 12 months to sell the property. No payments are required during this time.

A: Yes, All remaining equity goes to the estate or heirs and they will never be stuck with any debt.

Estate or Heir options:

– Sell the home and using the funds from the sale of the home to pay off the reverse mortgage and keep remaining equity
– Write a check to pay off the mortgage
– Refinance the loan into their own name and pay off the reverse mortgage

A: The reverse mortgage lender has the expectations that the HOA dues, homeowners insurance and property taxes are paid and for the borrower to continue to occupy the property as their primary residence.

A: Currently having a mortgage is acceptable to qualify for a reverse mortgage. The reverse mortgage generally will need to be in the 1st lien position so the current mortgage will need to be paid off thru the new loan process. If you are applying for a reverse second mortgage then your current mortgage can stay in place.

A: Credit scores are not a determining factor in qualifying for most reverse mortgage programs. There will be an analysis of payment history over the last 24 months and longer to determine if a loan estimate set aside is required to cover the homeowners insurance and property tax payments.

There are minimal residual income rules set in place on some reverse mortgage programs. Each scenario is different so Contact us today to find out how the residual income rules might affect your approval.