Reverse Mortgage Frequently Asked Questions

Q. What is a reverse mortgage?

Q. Do I qualify for a reverse mortgage?

Answer:  If you are at least 62 years of age and own your home you may qualify. The home must be lived in as your owner occupied residence. You do not need to own your home free and clear. Any liens on the property must be paid off with the reverse mortgage. There are certain equity amount requirements and speaking with a loan officer is the best way to determine if you qualify.

There is a financial assessment coming in March 2015 for those who don’t do an application before. View our financial assessments video blog that explains more about this change. 

Q.  What types of properties are eligible?

 

Answer: Single family residences (SFR), planned unit developments (PUD), Townhomes, Manufactured Homes and Duplexes all qualify.   However, you must occupy as your primary residence. A condo may qualify however the complex needs to be FHA approved.

Q. Is the money I receive from the reverse mortgage tax free?

 

Answer: Yes the funds are tax free as they are your equity and not income.  The funds can be used any way you wish such as travel, medical, gifts, bills and etc.  A reverse mortgage also does not effect medicare or social security.

Q. Do I retain the title to my home?

 

Answer: Yes! A reverse mortgage is a lien much like a traditional home loan. You retain your title. You can also sell at any time if you desire as there is no prepayment penalty. Your home can never be taken by the lender and the lender can never force you to sell as long as you occupy the home.

Q. Do I have to make monthly mortgage payments with a reverse mortgage?

Answer: No. You are never required to make a mortgage payment with a reverse mortgage as long as you occupy the property. You must, however, continue to pay your dues (if applicable) home owners insurance and property taxes. There are no prepayment penalties so you may pay off all or part of the loan at any time if you so desire.

Q. When is a reverse mortgage due?

Answer: The loan comes due when the home is sold or the last borrower passes away or no longer occupies the property.

Q. Do you need good credit or a certain amount of income to qualify for a reverse mortgage?

Answer: There are absolutely no credit, income, employment or health requirements to qualify for a reverse mortgage.  However, coming in March 2015, the financial assessment change is coming it will add more scrutiny to your ability to attain a reverse mortgage. See our video blog here.

Q. How much money can I borrow?

Answer: The amount of money you can receive is based on your age, current interest rate and the appraised value of your property. The best way to determine this is to speak with a loan officer today.

Q. How can I use the money from a reverse mortgage?

Answer: You can use the funds from a reverse mortgage any way you see fit. There are no restrictions. Medical expenses, monthly bills, a dream vacation or anything you can think of.