Questions
What is a Reverse Mortgage?
A Reverse Mortgage is a
loan that enables homeowners 62 or older to borrow against the equity in their
home, without having to sell their home, give up title, or take on a new monthly
mortgage payment. The borrower will never, under any circumstances resulting
from the Reverse Mortgage, be forced to leave their home providing they make
their real estate property tax and insurance payments.
How does a Reverse Mortgage work?
A Reverse Mortgage uses
the equity in the primary residence to pay the borrower cash they can use for
any of life’s needs. The loan is in reverse meaning that the lender pays the
borrower instead of the borrower paying the lender. And the older the borrower
is the more money they can qualify for. Borrowers can receive any combination of
a lump sum, a line of credit, a monthly amount for a specific term, or a monthly
payment in tenure (for the remainder of their life). The loan is due and payable
when the last borrower dies, sells the home or permanently moves out. The loan
is non-recourse, meaning they will never owe more on the loan than the value of
the home. The borrower(s) retain title and the same rights of inheritance just
as on a traditional forward mortgage.
How much am I entitled to receive through a Reverse Mortgage?
The amount you are
entitled to receive is based on the value of your home, your age and current
interest rates.
Do I maintain full home ownership with a Reverse Mortgage?
Yes. You own your home
and hold the title the same way you have owned your home with any regular
mortgage.
How does a Reverse Mortgage differ from a standard home
equity loan?
With a standard home
equity loan, you must begin to make regular payments to repay the loan as soon
as the loan is taken out. You must be able to prove that you have a monthly
income and sufficient credit to qualify for the loan. With a Reverse Mortgage
there are no income, nor credit requirements and no monthly payments…. EVER!
What are the eligibility requirements for a Reverse
Mortgage?
All homeowners over the age of 62 who occupy their home as their primary
residence are eligible. (rental properties and vacation homes do not qualify)
Will Reverse Mortgage payments affect my Social Security or
Medicare benefits?
No. Reverse mortgage proceeds will not affect eligibility for retirement,
survivor, disability, or Medicare benefits payable under the Social Security
Act. A Reverse Mortgage is a mortgage loan.
Do I have to pay tax on the money I receive?
No. As with any home equity loan, the money you receive is not considered
taxable income by the IRS.
When I die, will the bank take my home?
No. When you pass away, your heirs have up to one year to repay the loan. This
can be done by refinancing the home into their name, selling the home and
repaying the loan with part of the proceeds, or paying off the balance with any
other available funds.
Are there any costs involved?
Yes. As with any mortgage there are closing costs involved but the costs are
financed into the loan. There are absolutely no out-of pocket expenses to you
other than your property appraisal.
If I die, will my spouse be protected?
Yes. Your spouse will continue to enjoy all of the great benefits that the
Reverse Mortgage has to offer.
What if later on I decide to sell my home?
Upon the sale or transfer of title of your home, your Reverse Mortgage will
become due and payable. This typically comes from the proceeds of the sale.
If you'd like to know
more about how a Reverse Mortgage can benefit you, please contact me for a
complimentary consultation. My toll free number is 866-885-5573, or
click here to send email.
You may use my secure
online form to send me your name age and property
information for a confidential Reverse Mortgage benefits analysis and my free
brochure Reverse Mortgage Fast Facts.
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