Reverse Mortgage Facts and Features
- Reverse mortgage loans have the power of longevity. The first was approved in 1961.
- While you will still need to pay property taxes and insurance and maintain the property, no monthly mortgage payments are required.
- There are multiple options to convert your home's equity to support your financial goals, such as receiving monthly payments, receiving a lump sum, or a growing line of credit over time.
- Proceeds you receive from a reverse mortgage loan are paid out tax free. Nonetheless, you may wish to consult your tax advisor.
- If the borrower passes away, an eligible non-borrowing spouse may be allowed to remain in the home providing they continue to maintain their home, pay property taxes and homeowners insurance, and otherwise comply with all loan terms.
- If the borrower chooses to access their equity via a line of credit, interest only accrues on funds that are used. Access to funds that are not used will increase over time at the effective rate. This feature allows for growing the amount of cash you access should you need or want to access it later in retirement.
- The FHA HECM loan is a non-recourse loan. This means that if your home sells for less than the loan balance, your heirs are not liable for the debt. Only the funds received from the sale of the home can be used to repay the loan.
- At the time of application, your home mortgage balance does not have to be paid off to be eligible. However, the reverse mortgage loan proceeds you receive must be used to pay off an existing mortgage (if one exists) and other outstanding liens. You will continue to hold title to your home subject to the new lien securing the reverse mortgage loan.
More Resources
National Reverse Mortgage Lenders Association (NRMLA)
https://www.nrmlaonline.org/
Phone: 1-202-939-1760
AARP free information on reverse mortgages
Phone: 1-800-209-8085
The Nationwide Mortgage Licensing System & Registry
http://www.nmlsconsumeraccess.org/
Housing Counseling Clearinghouse
Phone: 1-800-569-4287
The Eldercare Locator: Local Resources for Older Adults
http://www.eldercare.gov
Phone: 1-800-677-1116
Federal Trade Commission (FTC) to report possible fraud
http://www.ftc.gov
Phone: 1-877-FTC-HELP (1-877-382-4357)
National Council for Aging Care
http://www.aging.com/
Phone: 1-877-664-6140
Let’s Talk
Speak with one of our licensed Reverse Mortgage Loan Officers today who will clear up all the questions you have. Our well-trained and highly knowledgeable representatives will ensure that you have all the facts on this program, and we pride ourselves in making sure that every critical piece of information you need is properly disclosed to you (with no hidden details).