What is a reverse mortgage?
A reverse mortgage is a loan that allows you to borrow from the equity in your home. You can use the money however you would like. Unlike a traditional mortgage loan, the borrower does not have to make payments on a reverse mortgage as long as the home is their primary residence. Your age, the value of the house and paying off any existing mortgages on the house are all taken into account to determine how much money you can access.
How does a reverse mortgage work?
There is an application process that includes collection of documents and a financial review. The lender will want to know that you can afford the property taxes, homeowner’s insurance and monthly expenses although you will no longer have a monthly mortgage payment. A component of the process requires housing counseling with a HUD approved reverse mortgage housing counseling agency. Your lender can provide a list or you can visit the HUD website or call HUD at 800-569-4287.
Why choose the HomeOwnership Center for your reverse mortgage?
We are a non-profit housing agency that has been looking out for the interests of our clients for more than a decade. Our staff is not paid on commission nor are they paid bonuses. Our only goal is to find a solution that is best for you.
How do you get a reverse mortgage?
You apply with a reverse mortgage lender much as you would a traditional mortgage. You will want to work with a HUD approved lender. Reverse mortgages are governed by HUD and lenders must follow strict HUD guidelines.
Is a reverse mortgage right for everyone?
No, reverse mortgages are not for everyone. It depends very much on your personal situation. Some homeowners are better served with a Home Equity Line or simply refinancing their existing mortgage. One of the primary benefits of a reverse mortgage for most people that apply is that you will not have a monthly mortgage payment. You simply continue to pay your property taxes and homeowner’s insurance and of course home repairs as needed, but no monthly mortgage payment.
What can a reverse mortgage be used for?
The money you receive from a reverse mortgage belongs to you and you can spend it any way that you want. Some people might use the money to pay off bills or medical expenses while others might use it to make repairs to their home or fund their retirement. Since you don’t have to spend all of the money at one time, you can spend it only when you need to.
Will my spouse or heirs be able to keep my home?
If you are married at the time of the reverse mortgage, your spouse can continue to live in the home for as long as the home is their primary residence. A surviving spouse has the same rights. Your lender will review the specific details for your spouse. If you sell the home or the home is no longer your primary residence, the reverse mortgage loan balance with interest and any other fees associated with the loan must be paid. Your heirs will have the option of paying off the reverse mortgage and keeping your home or if they decide to sell the home, they must use the money to pay off the loan first. Any extra money will go to your surviving estate.
What kinds of homes are illegible for a reverse mortgage?
You must either own a single family home or a 2 to 4 unit home in which you occupy one of the units. HUD approved condominiums and manufactured homes may qualify if they meet FHA standards.