Debbie Lee

What is a Reverse Mortgage?

A Reverse mortgage is a type of home loan available to homeowners who are at least 62 years old that allows them to convert part of their home equity into cash. Instead of making loan payments to your lender, your lender makes payments to you using the payout option of your choosing. The loan is typically repaid when the borrower sells the home, passes away, or no longer lives in the home as their primary residence.

How do you qualify for a Reverse mortgage?

To qualify for a Reverse Mortgage, you or your partner must be at least 62 years old and live in the home as your primary residence. You'll need to own your home outright or have equity in the home, typically about 50%. You will also need to show you can pay property taxes and insurance. Additionally, you'll need to attend a reverse mortgage counseling session approved by the U.S.

How is a Reverse Mortgage repaid?

The loan is typically repaid when the borrower sells the home, passes away, or no longer lives in the home as their primary residence. Heirs can still inherit homes with reverse mortgages; however, they will need to either pay off the balance or sell the home. If they choose to sell, they can keep the profits minus the debt.

What are the different payout options?

Those approved for a Reverse Mortgage can receive funds as a lump sum, a line of credit, or monthly payments. You retain ownership of the home and can continue living in it. You'll need to continue paying property taxes, homeowners insurance, and maintain the home.

Do I still own my home with a Reverse Mortgage?

Yes. With a Reverse Mortgage, you retain ownership of your home. The loan is a mortgage on your property, but you continue to hold the title and can live in the home as long as you meet your obligations to maintain the property, pay property taxes, and keep homeowners insurance current.