Frequently Asked Questions: Reverse Mortgages

What is a Reverse Mortgage?*

A reverse mortgage is a national program available to homeowners age 62 and older providing you access to your home’s equity without having to make monthly mortgage payments. This program is available for your primary residence. You must continue paying your property taxes and homeowners insurance.

How much can I qualify for?*

The amount of funds available through a reverse mortgage loan is based on the youngest spouses age and the appraised value of your home. Generally, the loan to value (LTV) offered on a reverse mortgage is 40-70% of your appraised value but there are other factors that affect the loan amount as well.

Does the bank take title to my home?*

No, you will retain ownership and title. A reverse mortgage is just like other loans but with the extra flexibility to defer interest charges rather than making monthly repayments. Also, you may repay the interest, refinance, or sell your home at any time with no penalties.

When does the reverse mortgage need to be paid off?*

Your reverse mortgage will need to be paid off when you sell the property or no longer occupy your home as your primary residence for a period of 12 months or more. You will also have to pay it off if you fail to maintain loan requirements such as property taxes or homeowners insurance or property maintenance.

When the last surviving borrower passes away, the reverse mortgage becomes due and payable. Generally, your heirs will have up to six months to refinance your home should they choose to keep it, or, up to 12 months to sell it.

What does the lender expect from me?*

You must pay property taxes, homeowners insurance, and any homeowners association dues you may have. You also must continue to occupy the property.

I currently hold title in a trust, can I keep it that way?*

Yes, you can. However, the lender and title company require that they review the trust for approval. If you hold title in a trust you should let your loan officer know up front so they can get a copy of the trust for review.

Do I need to own my home free and clear, or can I get a reverse mortgage if I already have a loan on my house?*

You do not need to own your home to get a reverse mortgage. The proceeds can be used for any purpose, but any existing liens on the property must be paid off at closing. If the reverse mortgage is not large enough to cover your existing loan, you can still get