Frequently Asked Questions (faq)
- WHAT IS A REVERSE MORTGAGE? A Reverse Mortgage is a loan that enables senior
homeowners, age 62 and older, to eliminate all future
monthly mortgage payments and convert part of their
home equity into tax-free* income without selling
the home.
- WHAT ARE THE BIGGEST BENEFITS OF A REVERSE MORTGAGE? Payments relief (no monthly mortgage payments).
Government insured (by HUD / FHA). Maintain
ownership (your heirs can inherit your home).
Financial Assistance (use the cash from the equity
of your home to use however you like).
- DOES IT MATTER IF I HAVE A MORTGAGE OR OWN MY HOME FREE
AND CLEAR? It doesn’t matter. Those who own their home free and
clear will have access to more cash.
- I’VE HEARD REVERSE MORTGAGES GIVES OWNERSHIP OF MY HOME TO
THE BANK. IS THIS TRUE? No. You maintain ownership just as you would with
a traditional mortgage. You can sell your home at
anytime or leave it for your heirs who can sell the
home or refinance it in their names.
- WHAT ARE THE COSTS AND FEES? There are typically no out-of-pocket costs. One of the
real benefits of a Reverse Mortgage is that you can use
the money you get from your home's equity to pay for
the various fees that are part of the loan costs overall.
- WHAT ARE THE TAX CONSEQUENCES
OF A REVERSE MORTGAGE? WHAT
ABOUT MY SOCIAL SECURITY AND
MEDICARE BENEFITS? Because Reverse Mortgages are considered loan
advances and not income, the IRS considers them not
taxable. Similarly, having a Reverse Mortgage should
not affect your Social Security or Medicare benefits.
Please consult a tax advisor.
- WHAT ADVICE SHOULD I GET BEFORE
TAKING A REVERSE MORTGAGE? The Federal Government (HUD) requires you to take
a 45-minute counseling session. This is provided by
an independent, government-approved, housing
counseling agency. The counselor will explain the
pro's and con's of a Reverse Mortgage: costs and
financial implications, and other government or
nonprofit programs for which you may qualify.
This is mandated for your protection.
- IF I TAKE A REVERSE MORTGAGE,
WILL I STILL HAVE AN ESTATE THAT I
CAN LEAVE TO MY HEIRS? When you sell your home or no longer use it for your
primary residence, you or your estate must repay the
lender for the cash received from the Reverse
Mortgage, plus interest and service fees- often paid
with the remaining equity. Any remaining equity
belongs to you or your heirs. We ensure that you can
never owe more than the home's appraised value when
it is sold. None of your other assets will be affected by
your Reverse Mortgage loan.
- WHEN MUST A REVERSE MORTGAGE
LOAN BE REPAID? Your Reverse Mortgage loan becomes due and must be
paid in full when one or more of the following
conditions occurs: (a) the last surviving borrower
passes away or sells the home; (b) all borrowers
permanently move out of the home; (c) the last
surviving borrower fails to live in the home for 12
consecutive months due to physical or mental illness;
(d) you fail to pay property taxes or insurance;
(e) you let the property deteriorate beyond what
is considered reasonable wear and tear, and do
not correct the problems.
- HOW DO I KNOW IF I QUALIFY? HOW
CAN I FIND OUT HOW MUCH CASH I
CAN RECEIVE? Call your local Reverse Mortgage Specialist (see
attached business card for contact information) for
answers to all your questions. We also have free videos
and educational materials.
