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Reverse Mortgage

A reverse mortgage is a special type of home loan, designed for people 62 years and older, that lets you convert a portion of your home’s equity into cash, all while maintaining ownership of your home. In addition to meeting the age requirement, you must be living in a single family home, as your primary residence, with homeowner’s insurance.

Through a reverse mortgage, lenders make a tax-free payment or payments to the borrower, as opposed to the borrower making monthly payments to the lender. This can be done in a few different ways, including:

  • Full or partial lump sum payment
  • Line of credit
  • Monthly payments
  • Combination of the above


There are many benefits of a reverse mortgage:

  • Own your home and retain the title, as long as you remain current on taxes, homeowner’s insurance and comply with the loan terms
  • Make no payments, if you comply with the loan terms and requirements
  • Use the tax-free money available to you however you’d like: pay off credit card debt, pay for senior care, or even home modifications
  • Pay off an existing mortgage
  • Make your retirement savings last longer

What you need to know

During your reverse mortgage loan period, your obligations are to pay for:

  • Homeowner’s insurance
  • Property taxes
  • Basic home maintenance

The loan becomes

due when the last borrower:

  • Sells or transfers the home
  • Passes away
  • Does not pay home taxes and insurance
  • Leaves the home permanently or for more than 12 consecutive months
  • No longer occupies the home as the primary residence
  • Defaults on the loan terms

The mortgage is repaid once the last borrower has sold the home or passes away. Because it’s a non-recourse loan backed by federal insurance, the home is the only collateral that can be used to repay the loan. If the home sale doesn’t cover the balance of the loan, then the FHA pays the difference – not the borrower’s family. If the home sells with proceeds made, the reverse mortgage must first be repaid and the remaining balance would go to the estate.

If heirs choose to keep the home, they can do so by refinancing the reverse mortgage to a conventional mortgage loan.

A reverse mortgage is more than just a loan option, it’s a financial decision that should be discussed among family members. If you are 62 years or older and are ready to learn more, make the call today (888) 991-8563 or complete the online application. Our expert team is ready to guide you through the reverse mortgage process.

Category: Reverse mortgage

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