Reverse Mortgage

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Mortgage / Home Loan Type

Select the type of home loan mortgage option you are considering.

Property Type:

Select the property/home type you are considering.

Overview

There are a variety of reverse mortgages types. However, typically a reverse mortgage is a loan for seniors age 62 and older. The general definition for a reverse mortgage is a financial agreement in which a homeowner relinquishes equity in their home in exchange for regular payments, typically to supplement retirement income. The equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage. Reverse mortgage loans are commonly used to pay for home renovations, medical and daily living expenses. Homeowners who have an existing mortgage often use the reverse mortgage loan to pay off their existing mortgage and eliminate monthly mortgage payments.

Types of Reverse Mortgages

If you’re 62 or older – and want money to pay off your mortgage, supplement your income, or pay for healthcare expenses – you may consider a reverse mortgage. It allows you to convert part of the equity in your home into cash without having to sell your home or pay additional monthly bills.

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How to Qualify for a Reverse Mortgage

The HECM is a safe plan that can give older Americans greater financial security. Many seniors use it to supplement Social Security, meet unexpected medical expenses, & make home improvements.

General Eligibility

At least 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, have the financial resources to pay ongoing property charges including taxes and insurance, and you must live in the home.

Property Eligibility

To be eligible for the FHA HECM, your home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible

Heirs Eligibility

When the home is sold or no longer used as a primary residence, the cash, interest, and other HECM finance charges must be repaid. All proceeds beyond the amount owed belong to your spouse or estate. This means any remaining equity can be transferred to heirs

Fees & Costs

Reverse mortgage lenders generally charge an origination fee and other closing costs, as well as servicing fees over the life of the mortgage. Some also charge mortgage insurance premiums

How Reverse Mortgage Payments Are Received

Most reverse mortgages today are insured by the Federal Housing Administration (FHA) as part of its Home Equity Conversion Mortgage (HECM) program. With a HECM loan, you can receive your money in a variety of ways:

For fixed HECMs, you can receive a one-time single lump sum disbursement at the mortgage closing

Receive equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence

A combination of line of credit and scheduled monthly payments for as long as you remain in the home

With a term reverse mortgage payment option, you will receive equal monthly payments for a fixed period of months selected

A combination of line of credit plus monthly payments for a fixed period of months selected by the borrower

Receive unscheduled payments or in installments, at times and in an amount of your choosing until the line of credit is exhausted