A reverse mortgage allows homeowners aged 62 or older to convert home equity into cash.
Seniors Concerns...
- Is your mortgage paid off?
- Is your Social Security and/or pension sufficient to last you through retirement?
- Rising costs of living: gas, health care, food, utilities, medications, etc
- Do you have a Fixed income and worry about unexpected expenses?
Will you outlive your money?...
Reverse mortgage proceeds may be used for anything!
- Pay off existing mortgage
- Pay taxes, insurance, HOA dues
- Healthcare costs, prescriptions
- Home improvements / Repairs
- Long-term Care
- Charitable and family gifting
- Retirement home purchase
- Emergency Fund
Borrower Benefits
- Keep your home! You retain title*
- Make no monthly mortgage payments
- No health, income or credit qualifications
- The HECM (Home Equity Conversion Mortgage) is FHA-Insured
*Homeowner continues to pay insurance and property taxes and keep the home in good repair.
HECM – Home Equity Conversion Mortgage
- The Home Equity Conversion Mortgage (HECM) loan - The oldest and most common reverse mortgage.
- Insured by the government through the Federal Housing Administration (FHA) - This means that HUD guarantees you will receive your funds for the life of your loan.
- A unique feature of the HECM loan is mandatory Mortgage Insurance Premium (MIP)
- HUD guarantees your funds will be available if the lender or servicer is not able to make payments
- Maximum FHA appraised value limit: $625,500
Consumer Protection
- Non-recourse: The HECM is a non-recourse loan as long as you or your estate sells the property to pay off the debt. (If you or your estate wants to retain the property, the balance must be paid in full.) Learn more about Non-Recourse Loans
- Approved counseling is required. find HUD Approved HECM counselors
- After estate pays lender, estate keeps all remaining equity.
Eligibility / Requirements
- Age 62 years or older
- Must have some home equity
- Home must be principal residence
Eligible Property Types
- Primary residence only
- Single family homes
- 1-4 Unit properties
- Some manufactured homes
- Condominiums and townhouses search for HUD Approved Condominiums
HECM Adjustable Payout Options
- Cash Lump Sum
- Line of Credit: Provides draw flexibility Learn about the Line of Credit Growth
- Tenure Payments: Monthly payments for as long as you stay in home
- Term Payments: Monthly payments for a fixed time period
- Combination of the above
HECM Fixed Payout Options
Payout Amount is Determined By
- Age of youngest borrower when loan is taken out
- Appraised value of the home
- Amount of equity in home
- Current interest rates See all Interest Rates
Access the Reverse Mortgage Calculator for a quick estimate
Loan Repayment
- Loan is paid when the last surviving borrower sells, moves or passes away, or you may choose to pay off the loan early.
- When you move out of your home, your estate has 3 to 12 months to repay the loan.
Learn more about Post Closing Issues
Basic Borrower Responsibilities
- Pay property taxes
- Keep up homeowner insurance
- Maintain home in a reasonably good condition
- Must continue to live in home as your primary residence
Government Benefit Considerations
- Generally, your Federal benefits such as Social Security or Medicare, are not affected.
- For State benefits, such as Medicaid, any reverse mortgage proceeds received must be used immediately. Funds retained would count as an asset and could impact Medicaid eligibility. Borrowers should always consult proper government agencies and financial consultants.
Learn More about Medicaid Issues Here
The Reverse Mortgage Process
- Awareness – Did you know that more than a half million seniors are currently enjoying a reverse mortgage?
- Up front Education - Homeowner contacts a Reverse Mortgage Loan Officer for personalized information. Note: We certainly encourage you to do research on your own, talk to your family, advisors, surf Our Blog
- Counseling – Third party, independent counseling is required for all reverse mortgages and may be conducted face-to-face or by telephone.
- Application/Disclosure - Homeowner fills out a loan application and selects a payment plan. Lender discloses to homeowner the estimated total cost of the loan, as required by the federal Truth in Lending Act.
- Processing - Lender orders an appraisal, which the homeowner pays for, to place a value on the home.
- Underwriting - Lender finalizes loan parameters with homeowner.
- Closing - When the loan package is approved, closing (signing) of loan is scheduled. Interest rates are calculated. Closing papers and final figures are prepared. Closing costs are normally financed as part of the loan.
- Right of Rescission – Homeowner has three business days after signing papers in which to cancel the loan.
- Disbursement - The homeowner may use the loan proceeds for any purpose.
For more on the process visit Steps to getting a Reverse Mortgage
Top Reverse Mortgage PDF Downloads
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You'll find out...
Download Reverse Mortgage Essentials (PDF file) |
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This guide lists the most common questions asked by consumers about reverse mortgages with the answers. |
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The NRMLA Guide to Aging in Place (PDF file)
NRMLA, in partnership with the National Council for Aging In Place, has created this booklet on design ideas, useful products and how to find them, and professionals who can help plan and implement home modifications. |
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This guide helps explain to the children common questions and answers regards to inheritance, and misconceptions. |
Other Important Links
Recommended 3rd Party Sites
Have a question about the Reverse Mortgage? If you or a family member would like a complete, no-obligation personal analysis please call Toll Free (888) 801-2762 or request free analysis