A Reverse Mortgage is a special loan used by senior homeowners to convert some of their equity in their home into care or tax-free income without selling the home, give up title, or take on new monthly mortgage payments. 

 

With a Reverse Mortgage, you do not make payments.  Rather the lender makes payments directly to you.  While the mortgage loan remains outstanding, you continue to own the home.  Borrowers will never be forced from their home providing they pay their real estate taxes and homeowner insurance premiums.  Borrowers can receive a lump sum or a line of credit, or a combination of monthly payments and a line of credit.  The repayment terms cannot exceed the value of the home.  The loan becomes due and payable when you no longer occupy the home as a principal residence. 

 

To qualify for a Reverse Mortgage, you must be 62 years of age and own your own home.  No income or medical requirements apply.  The size of the Reverse Mortgage depends on your age at the time you apply for the loan, the type of reverse mortgage you select, the value of your home, current interest rates, and possibly where you live.  The older you are and the more valuable your home and/or the less you owe, the larger the Reverse Mortgage will be.

 

Costs include origination fee, appraisal fee, and other costs similar to a new mortgage.  The money provided to you is tax free.  You should check with your tax specialist or your local agency on aging.  You can also visit www.eldercare.gov or other similar websites.  Reverse Mortgages are offered by banks.  The FHA Home Equity Conversion Mortgage Program (HECM) is federally insured.  Check with your existing lender and the Internet to find other sources.  We would be happy to help you with this through our bank network.