A. Reverse mortgages are for homeowners at least 62 years of age with equity in their home.
A. Yes, but any existing mortgage must be paid off when the reverse mortgage closes. The funds from the reverse mortgage can be used for that purpose.
A. No. Funds received from a reverse mortgage are generally categorized as loan advances and not taxable income. Consult your tax advisor for more information.
A. The interest that accrues on your loan is generally deductible when the loan is repaid, which occurs when the last borrower permanently leaves the property. Consult your tax advisor for more information.
Q. How do the proceeds from a reverse mortgage affect Social Security, Medicare or pension benefits?
A. The benefit from a reverse mortgage typically does not affect these benefits. Consult your financial advisor or local senior agency for more information.
A. Generally a reverse mortgage will not affect these or most other means-tested benefits as long as the monthly cash advances are fully spent every month and not accumulated. However, programs do vary by state, so we strongly encourage you to confirm with your local senior services agency that your benefits will not be affected.
A. Under our reverse mortgage programs, you will pay an origination fee, a mortgagee insurance fee and actual closing costs, including charges by the title and/or escrow companies. All of these costs can be financed as part of the initial loan advance. You will also receive disclosures of these costs as part of the loan process. It is also customary for the lender to collect a deposit for the appraisal at the time of application. This is the only lender fee you will be required to pay out of pocket.
A. You must repay the money that you have received plus accumulated interest and service fees (when applicable) up to the appraised market value of the home. The repayment is generally due within 6 months of the maturity event.
A. A reverse mortgage is a “non-recourse” loan, which means that you, your heirs, or your estate cannot be required to repay more than the appraised market value of the home at the maturity of the loan. If the loan balance exceeds the value of the home, you, your heirs, or your estate will only be obligated to repay an amount up to the current appraisal value of the property.
A. A reverse mortgage is only a lien against the property; therefore, the title will stay in your name.
A. You are required to pay your property taxes, homeowners and flood (if required) insurance premiums and other expenses necessary to maintain the home.
A. Loan repayment is triggered when the home is sold or is no longer occupied as your primary residence. In a case of more than one borrower, repayment is triggered when the last borrower permanently moves out. Until one of these events take place, the last borrower may live in the home and not make any monthly mortgage payments to the lender.
A. No, the loan can be repaid by refinancing the existing reverse mortgage with a standard mortgage loan.
A. The impact of a reverse mortgage is no different than that of a purchase or refinance mortgage. Repayment of the mortgage is due upon sale of the home.
A. In most cases, the answer is yes. As a part of the loan process, you will need to provide a copy of the trust or a Certification of Trust for review by the lender and title company.
