Reverse Mortgage Counseling FAQ

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Frequently Asked Questions

What is a reverse mortgage?

A reverse mortgage is a type of home loan for seniors that allows a homeowner to convert a portion of their home equity into cash with no monthly payments required until the client leaves the home permanently or goes to a nursing home for 12 months in a row.

Can I qualify for a reverse mortgage?

To be eligible for a reverse mortgage, you must be 62 years of age or older, own your home outright or have a low enough mortgage balance so that a reverse mortgage will be able to pay it off. You also must live in your house. You are required to receive counseling from a HUD-approved counseling agency prior to closing your reverse mortgage loan.

Are there circumstances in which I could lose my home?

Your reverse mortgage lender cannot take your home away as long as the home remains your primary residence, you pay your taxes, homeowners insurance, and maintain the property in good condition. No repayments on the loan are required during this time.

How can I receive my reverse mortgage payments?

There are five options:

  • Tenure: equal monthly payments for as long as the borrower occupies the property as their primary residence.
  • Term: equal monthly payments for a fixed period of time.
  • Line of credit: unscheduled drawdowns on the loan in the amounts and at the times of the borrower’s choosing.
  • Modified tenure: a combination of monthly payments and a line of credit for as long as the borrower occupies the property as his/her primary residence.
  • Modified term: a combination of monthly payments for a fixed period of time and a line of credit for as long as the borrower occupies the property as his/her primary residence.

Will I still have an estate that I can leave to my heirs?

If you vacate your home for more than 12 consecutive months or die, you or your heirs must repay your reverse mortgage loan and all interest and other fees. The remainder of the equity, if any, belongs to you or your heirs. There is no prepayment penalty on the reverse mortgage. Your other assets are never affected by this debt. You will never owe more than the market value of your home.