Reverse Mortgage Information

A Reverse Mortgage enables senior American homeowners 62 or older to convert their home equity amount into cash, while continuing to live in the home. The money can be received in one of three ways (or any combination of these):

1. As one lump sum
2. As monthly income for life or a fixed no. of years
3. As a line of credit to draw upon

Reverse Mortgages are NOT solely for those in difficult financial situations. They can be used by anyone who wishes to convert their home equity value into liquid assets (like cash).

This FHA / HUD government-approved reverse mortgage program provides cash to senior homeowners who need an additional source of income to continue to live in their homes.

The money derived from a reverse mortgage need not be repaid as long as you continue to live in your home. This reverse mortgage now provides senior homeowners a safe way to access the equity in their homes. Thus it enables them to enjoy the retirement years with greater financial security and comfort.

One of the benefits of taking a reverse mortgage is that the money your heirs owe can never exceed the actual value of your house. If today’s burgeoning housing prices begin to somehow decline, your children/heirs will not be responsible for amounts higher than the house is worth.

Also, accepting the reverse mortgage money does not alter the ownership of the house or property taken for reverse mortgage. The homeowner retains title to the property and can choose to sell the home at any time.

This reverse mortgage money is yours to use as you see fit. The money received is fully tax-free. There are no monthly repayments needed; but the payment of taxes, insurance and general upkeep are still the responsibilities of the homeowner.

You can choose to pay off an existing mortgage or equity loan by using the money from a Reverse Mortgage. A Reverse Mortgage has no income or credit pre-qualifications or requirements.

The FHA, a US government agency, guarantees that you will receive all the reverse mortgage payments that are owed to you. The Reverse Mortgage is a non-recourse loan, which means that the bank or lender cannot come after any person for loan repayment.

How to qualify for a Reverse Mortgage

1. You must be 62 years of age at the minimum

2. Your home must be owned free and clear and can have a mortgage that can be paid from equity

3. It must be your place of principal residence or life

4. The property for reverse mortgage must be a single-family home; a one-to-four unit dwelling with one unit occupied by the applicant; or a unit in a HUD-approved condominium or PUD - Planned Unit Development.

5. The property must meet some minimum construction standards
The amount available from a reverse mortgage is based on various factors: Your age, home value, current interest rates and the specific plan you are choosing. The older you are and the higher the value of your home, the more money you can get from a reverse mortgage. To get a FHA insured Reverse Mortgage, you will need to pay an origination fee, actual closing costs and a mortgage insurance premium (MIP). These fees can be financed with your loan itself - there need not be any Out-of-Pocket costs.
All applications for Reverse Mortgage are required to consult with a HUD-approved counselor or adviser first.