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Reverse Mortgages                                     Online Request For Quote

 

FREQUENTLY ASKED QUESTIONS
You may scroll through all the answers below or you may click on
any individual question and go directly to its answer

  1. Who are Reverse Mortgages designed to help?
  2. Can a Reverse Mortgage be taken out if there is already a conventional mortgage on the home?
  3. What types of homes won't qualify for a Reverse Mortgage?
  4. What about a home in a "living trust"?
  5. Will I have any tax liability for the Reverse Mortgage proceeds?
  6. Can the interest charged on my loan principal be deducted for tax purposes?
  7. How do the monies from a Reverse Mortgage affect Social Security, Medicare or pension benefits?
  8. What are the upfront costs associated with a Reverse Mortgage?
  9. What is due when the loan is repaid?
  10. What if I owe more than my home is worth?
  11. Does the lender take the house?
  12. If there are no payments, what are my responsibilities as a borrower with a Reverse Mortgage?
  13. When does the loan become due and payable?
  14. Do I or my heirs have to sell the property to repay the loan?
  15. How much money can I get?

ANSWERS TO QUESTIONS

  1. Who are Reverse Mortgages designed to help?
    They are designed to help senior citizens who are homeowners that are at least 62 years old and who have a need or desire for cash but don't want to sell their home.
  2. Can a Reverse Mortgage be taken out if there is already a conventional mortgage on the home?
    YES. However, any existing mortgages must be paid off at closing but the proceeds from the Reverse Mortgage can be used for this purpose.
  3. What types of homes won't qualify for a Reverse Mortgage?
    Generally the following do not qualify:   vacation homes or other secondary residences, mobile or manufactured homes not attached to a permanent foundation, rental properties of more than four units and homes on leased lands.
  4. What about a home in a "living trust"?
    A homeowner who has put the home in a living trust can usually take out a Reverse Mortgage, subject to review of the trust documents.
  5. Will I have any tax liability for the Reverse Mortgage proceeds?
    Currently the Internal Revenue Service treats monies received from a Reverse Mortgage to be loan advances and not taxable income. You should however consult your tax advisor.
  6. Can the interest charged on my loan principal be deducted for tax purposes?
    The interest accrues and is deductible when the loan balance and interest is repaid, when the borrower permanently leaves the property. Again, however, it is not the purpose of this website to give tax advice so you should consult your tax advisor.
  7. How do the monies from a Reverse Mortgage affect Social Security, Medicare or pension benefits?
    Since the money you receive is not "earned income", it is non-taxable and should not affect your eligibility for retirement, survivor disability, or Medicare benefits payable under the Social Security Act.
  8. What are the upfront costs associated with a Reverse Mortgage?
    The borrower will pay an origination fee and actual closing costs, including charges by the title and escrow companies. All of these costs can be financed as part of the initial loan advance at closing.
  9. What is due when the loan is repaid?
    The borrower pays back the cash advances they have received plus accumulated interest on the advances.
  10. What if I owe more than my home is worth?
    All Reverse Mortgages are "non-recourse" loans, which means that the borrower can never owe more than the value of the home regardless of loan balance.
  11. Does the lender take the house?
    This is a misconception; a Reverse Mortgage is merely a loan against the property. The title remains in the name of the borrower and the lender is only repaid the loan balance or the home value which ever is less.
  12. If there are no payments, what are my responsibilities as a borrower with a Reverse Mortgage?
    You are required to pay your property taxes, keep current property insurance in place, maintain the home and notify the lender if you will be away from the property for an extended period.
  13. When does the loan become due and payable?
    The loan is due and payable when the borrower sells the property, permanently leaves the home, or passes away. In the case of a couple, it is the second to move out or die that triggers repayment. Until these events take place you live in the home and make no payments to the lender.
  14. Do I or my heirs have to sell the property to repay the loan?
    NO. Repayment can be accomplished by a refinancing of the existing Reverse Mortgage by a conventional mortgage loan or proceeds from another source can be used to repay the loan.
  15. How much money can I get?
    The AARP has an excellent tool to estimate how much you may qualify for on your home. Click Here to go to the AARP website and use the back button on your browser to return here.
    The AARP site does not take into account existing mortgages - it gives the total amount available and if you have existing mortgages you must deduct that amount from the total to see how much you actually qualify for. Click Here for another site that takes that into consideration.

 
Reverse Mortgages                                     Online Request For Quote