Reverse Mortgage loans enable Seniors, age 62 and older, to convert their home equity into tax-free cash, while retaining the ownership of their home. Unlike a regular mortgage, there are no monthly payments to be made and repayment of the loan is deferred until the borrower is no longer permanently living in the home. Since no monthly payments are made the amount owed grows over time, and the equity that remains after selling the home and paying off the loan grows smaller, however, property appreciation will negate this effect. With a Reverse Mortgage you will NEVER OWE MORE THAN YOUR HOME'S VALUE at the time the loan is repaid. Borrowers do continue to own their homes and are required to pay their property taxes and insurance.
A Reverse Mortgage must be the first and only mortgage on the property. Therefore, if there is an existing mortgage, it must be paid off with some of the proceeds from the Reverse Mortgage. As the home appreciates and the borrower grows older they may qualify for more money, and the Reverse Mortgage may be refinanced to borrow more against the increased equity.
Reverse Mortgage Eligibility
The Borrower
All Borrowers must be at least 62 years of age and occupy the home as their primary residence, the majority of the year. The Borrower(s) must own the home outright or have a low enough balance that the existing mortgage can be paid off through the proceeds of the Reverse Mortgage. It is required that the Borrower(s) have a free HUD Counseling session. Counseling is done over the telephone for convenience. All individuals on title must apply for the Reverse Mortgage, talk to a counselor over the phone, and sign the loan papers.
