Reverse Mortgage FAQs
A reverse mortgage enables homeowners ages 62 and older to convert part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. The reverse mortgage is “opposite” a traditional mortgage because the payment stream is “reversed.” Instead of making monthly payments to a lender, as with a traditional mortgage, the lender makes payments to you.
Qualifying for a reverse mortgage is easy for seniors because there are no monthly income, employment or asset qualifications.
A reverse mortgage provides seniors with funds from the equity in their homes. Repayment of the reverse mortgage transpires when the borrower moves out of the home or the home is sold.
Reverse Mortgages are great for:
- Seniors that don’t have enough income to make regular monthly mortgage payments.
- Seniors that could benefit from a stream of income during their retirement years.
- Seniors who are finding out that traditional retirement sources (IRAs, Pensions, Social Security) aren’t sufficient to cover everyday living expenses and healthcare needs.
- Seniors that prefer to use the equity in their home to give an early inheritance to family, travel, pay off debts or improve/renovate their home.
Types of Reverse Mortgages:
Lump Sum:
A single loan payment made to borrower at closing
Tenure Payments:
Borrower receives fixed monthly loan advances for as long as a borrower lives in home.
Line-of-Credit:
A credit account that allows the borrower to control the timing and amount of loan advances received.
Modified Tenure Payments:
Borrower receives fixed monthly loan advances for as long as borrower lives in home combined with a line-of-credit that the borrower can draw upon at any time.
Modified Term Payments:
Borrower receives fixed monthly loan advances for a specific period of time combined with a line-of-credit that the borrower can draw upon at any time.
Reverse Mortgages Explained:  Detailed presentation on reverse mortgages |
