Reverse
Mortgage
Let's Talk About Reverse Mortgages
A reverse mortgage is a type of home equity loan that allows you to convert some of the existing equity in your home into cash while you retain ownership of the property. Equity is the current cash value of a home minus the current loan balance.
What is a Reverse Mortgage?
A reverse mortgage is a type of home equity loan that allows you to convert some of the existing equity in your home into cash while you retain ownership of the property. Equity is the current cash value of a home minus the current loan balance.
Reverse mortgages allow the homeowner to borrow money using their home as collateral. Homeowners receive home equity loan payments from a bank — either as a lump sum or as ongoing payments — based on a percentage of the amount of equity they’ve accumulated in their home.
Reverse Mortgages aren’t required to be paid back while the recipients live in the home as their primary residence. And the recipients keep the title to the home.
Who can Benefit from a Reverse Mortgage?
Reverse Mortgages are a way for older Americans to access the equity in their homes and use it to fund retirement. However, there are strict rules and guidelines surrounding who qualifies for these mortgages.
Reverse Mortgage Eligibility Requirements
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Must be 62 years of age or older.
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The home you’re seeking a reverse mortgage on must be your primary residence. That means it must be the address where you spend the majority of the calendar year.
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You must be willing to set aside some of the reverse mortgage funds at closing (or have enough of your own money) to pay for things such as property taxes and insurance, as well as home maintenance and repair costs.
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You cannot be delinquent on any federal debt. This would include income taxes or federal student loans. However, it’s important to note that you may use funds from a reverse mortgage to pay off such debts.
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To get approved for a reverse mortgage, your house must also be in good shape, and you must participate in counseling that’s provided by a HUD-approved reverse mortgage counseling agency.
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Your home must be either a single-family home, two to four-unit owner-occupied home, townhouse, approved condominium unit, or certain manufactured homes.
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