Reverse Mortgage Common Questions

What is a Reverse Mortgage?

A Reverse Mortgage is a home loan. You borrow from the equity that you have built up in your home. You do not have to make any payments on the money that you borrow as long as you live in your home.

Who is eligible?

Any homeowner who is 62 years of age or older and owns their own home or is buying their home is eligible.
Your income level and credit score are NOT used to determine your eligibility, making almost all senior homeowners eligible.

How much money can I get?

The amount of money available depends on your age, your home's value and location, and current interest rates. You can select to receive your money through monthly payments, a line of credit, a lump sum, or some combination of the options.

How do people use the money?

You can use the money any way you desire. Most people use the funds from Reverse Mortgages for home improvements, for in-home health care, to pay taxes and insurance, or to generally improve their standard of living above what Social Security provides.

When does the loan have to be paid back?

Reverse Mortgages do not have to be paid back until the last surviving borrower dies, sells the home, or moves out. The total amount owed at the end of the loan equals all funds loaned from the cash advances you've received, plus the accrued interest.

Are Reverse Mortgages safe?

“The housing and Urban Development and Fannie Mae Reverse Mortgages that we carry are developed and regulated by the federal government. They are very safe! Also, since you will not be making any monthly payments, your home cannot be foreclosed upon for becoming late on your payments. Another safety feature for seniors.

How do interest rates affect my loan?

The interest rates are calculated using a formula set by the federal government. The interest rate at the time of closing is the initial rate for the loan. All interest rates for Reverse Mortgages are adjustable.

Are there any costs associated with Reverse Mortgages?

All of the above costs can be financed into the loan itself, which means that you do not have to come up with any money to apply! You will receive a “Good Faith Estimate” with your application showing the precise costs associated with your loan.

Who has title of the home?

The homeowners retain title to the property and can sell, payoff, or prepay the Reverse Mortgage at any time without penalty. The lender does NOT have title of the home, you retain ownership.

How are you paid?

Payment may be received 3 ways:

1. A single lump-sum disbursement
2. Equal monthly payments for as long as both borrowers live in your house.
3. A credit line that grows over time.

Your payments are determined by:

1. The age of the borrower, which determines the loan-to-value.
2. The market value of the home.
3. If there are any liens against the property.

Are the funds you receive considered income?

No. The money you receive is in the form of a loan and is not subject to federal income tax. In addition, these payments won't affect your Social Security or Medicare benefits. There are no income or asset limitations for borrowers receiving a Reverse Mortgage, nor are there any medical or insurance examinations.

How do I get started?

To get started with a Reverse Mortgage, contact Dan Clark; He can personally answer any question you may have, and help you to get started on your application today. Dan will walk you through the application process step-by-step to ensure your Reverse Mortgage is an easy option for you.

Please feel free to contact Dan today at (503) 805-9185.