What is a Reverse
A loan that enables
homeowners 62 and older, to convert home equity into
tax-free income without selling, giving up title, or
having monthly mortgage payments.
The payment stream is “reversed” and the lender makes
payments to you.
Eligible property types are single-family homes,
manufactured homes built after June 1976, qualified
condominiums, and townhouses.
Your Retirement Years
You can use the funds from
the reverse mortgage for anything:
Daily living expenses
Home repairs or
Health care expenses,
including prescription drugs or in-home care
Pay-off of existing
Payoff your first or
And any other needs you
There are no income or
medical requirements to qualify.
When are Your Payments
You can choose how to
receive the money from a reverse mortgage:
The amount of money you get
from a reverse mortgage depends on:
The funds from a reverse
mortgage are tax-free; it’s your money, not additional
A reverse mortgage will not affect your Social Security
or Medicare benefits.
Contact me to see how much money is available to you and
if a reverse mortgage makes sense.
Paying Back Your Loan?
No monthly payments are due
on a reverse mortgage while it is outstanding.
The loan is repaid only when you:
The amount owed can never
exceed the value of your home.
When the home is sold and the sales proceeds exceed the
amount owed on reverse mortgage, the excess money goes
to you or your estate.
Reverse Mortgage FAQ’s
Q. Who are reverse
mortgages designed for?
A. They are designed for homeowners at least 62 years of
age with significant equity in their homes.
Q. Can a reverse mortgage be taken out if there is
already a conventional mortgage on the home?
A. Yes, but any existing mortgages must be paid off at
closing. The proceeds from the reverse mortgage may be
used for that purpose.
Q. What types of homes won't qualify for a reverse
A. Generally 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 do not qualify.
Q. What about a home in a "living trust"?
A. 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.
Q. Will I have any tax liability for the reverse
A. Currently the Internal Revenue Service treats monies
received from a reverse mortgage to be loan advances and
not taxable income. For your specific situation, we
recommend that you consult your tax advisor.
Q. Can the interest charged on my loan principal be
deducted for tax purposes?
A. The interest accrues and is deductible when the loan
balance and interest is repaid, when the borrower
permanently leaves the property. For your specific
situation, we recommend that you consult your tax
Q. How do the monies from a reverse mortgage affect
Social Security, Medicare or pension benefits?
A. The proceeds from a reverse mortgage do not affect
these benefits. For your specific situation, we
recommend that you consult your financial advisor.
Q. If I take out a reverse mortgage, will my SSI or
Medicaid benefits be affected?
A. No, 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. Programs do vary by state, so it's
advisable to check with the local Area Agency on Aging.
We also recommend that you consult your financial
Q. What are the upfront costs associated with a
A. 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.
Q. What is due when the loan is repaid?
A. The borrower pays back the cash advances they have
received plus accumulated interest.
Q. What if I owe more than my home is worth?
A. All reverse mortgages are “non-recourse” loans, which
mean that the borrower can never owe more than the value
of the home regardless of loan balance.
Q. Does the lender take the house?
A. 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.
Q. If there are no payments, what are my
responsibilities as a borrower with a reverse mortgage?
A. 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.
Q. When does the loan become due and payable?
A. 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
Q. Do I or my heirs have to sell the property to
repay the loan?
A. No, repayment can be accomplished by a refinancing of
the existing reverse mortgage by a conventional mortgage