Think You Know All About a Reverse Mortgage? Check Here to Confirm the Facts!

What is a Reverse Mortgage?

A Reverse Mortgage is just like a line of credit without a monthly mortgage payment.  It is a program that allows homeowners age 62 and older to convert the home value into tax-free cash while maintaining homeownership.

In other words, the home pays back the homeowner so that the money received can open new financial opportunities. Best of all, the homeowner is never forced to leave the security of the home as long as they continue to live there.

What are Qualification Requirements?

To qualify for a Reverse Mortgage:

  • One homeowner must be at least 62 years old,
  • Occupy the property as their primary residence,
  • Pay off any existing mortgages at the time of settlement, and
  • Attend a HUD-approved housing counseling session.

 How Can the Money be Used?

Money obtained from a Reverse Mortgage can be used for any reason. Some of the most common uses include:

  • Paying off existing mortgages
  • Paying off credit card debts
  • Making home improvements
  • Purchasing a new home
  • Supplementing income
  • Paying for in-home health care
  • Traveling
  • Buying long-term care insurance
  • Helping family members

How Much Money is Available?

The amount of money available depends on three factors: the age of the borrowers, the appraised value of the home, and current interest rates. 

How is the Money Disbursed?

The Reverse Mortgage offers flexible options, so the homeowners decide exactly how they want to receive the money.  They may combine any or all of these options and change payment plans whenever necessary to customize a program that best meets their needs.  The payment options include:

  • Lump Sum Payment: All or a specified amount of the money is available at once.
  • The line of Credit: The money remains in an account until a need arises. When left in the account this money will grow, giving the borrower access to more funds in the future.
  • Tenure Plan: A certain amount of money is available monthly for as long as the borrower lives in the home.
  • Term Plan: A certain amount of money is available over a specified number of years.

 How is the Reverse Mortgage Repaid?

The loan becomes due with interest when the borrower no longer lives on the property. The borrower, or the estate, may pay back the loan by either selling the property or refinancing the mortgage.

 If a Current Mortgage is in the Home, Can a Reverse Mortgage be Done?

Yes, in fact, many homeowners do a Reverse Mortgage to free them from this monthly obligation.  The only condition is that there must be enough money from the Reverse Mortgage to pay off the current mortgage.  Any money that is left over goes to the borrower for any purpose.

Can a Reverse Mortgage be Used to Purchase a Home?

Yes!  It can be a great option when downsizing.  Contact Reverse Mortgage Answers, LLC for more details.

 How is the Government Involved?

The Federal Housing Administration (FHA) insures the loan.  If the loan balance is greater than what the property is worth, the borrower is not responsible for the money beyond the current market value of the home.  FHA will pay for any shortfall.  In contrast, if the loan balance is less than the value of the home, the homeowner or the estate will only have to pay the loan balance, and the remaining money goes to them.

 What Happen When One Spouse Passes?

If one spouse has passed and the surviving spouse is listed as a borrower on the Reverse Mortgage, he or she can continue to live in the home, and the terms of the loan do not change.

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Location

Headquarters
614 Old Edmondson Ave., Suite 200
Catonsville, MD 21228-3360
Toll Free:
1-800-420-5515

Maryland Office:
410-788-7070

Eastern Shore Office:
410-600-0600

District of Columbia:
202-719-0625

Virginia:
703-879-2316

Licenses

NMLS # 179014
www.nmlsconsumeraccess.org

Maryland - Lender # 06-20057

District of Columbia - Mortgage Broker # MLB179014

Virginia - Licensed by the VA State Corp. Commission, Mortgage Broker # MC5642

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Reverse Mortgage Answers on Facebook

Recently, we helped a client who inherited a property with her brother and sister. She wanted to keep the home, but the house was left to all the siblings. She lived on a fixed income, and she could not afford a monthly mortgage payment. Her lawyer referred her to me, and she gave me a call. We were able to use the Reverse Mortgage to pay off her siblings so she would become the sole owner and remain in the home. ... See MoreSee Less

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5 days ago

Reverse Mortgage Answers

After a person does a Reverse Mortgage, does he or she have any responsibilities afterward? ... See MoreSee Less

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After a person does a Reverse Mortgage, does he or she have any responsibilities afterward? Let's find out the correct answer to that today at 4:00 p.m. with Mr. Mark McVearry. We hope that our weekly live videos are educating you about the Reverse Mortgage in a short, but effective manner. See you soon! ... See MoreSee Less

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