Reverse Mortgage Information You Can Count On

How does a reverse mortgage work? When does a reverse loan become due? Get answers to all of your questions on reverse mortgages and more reverse mortgage information right here with SeniorClarity’s reverse mortgage FAQ (frequently asked questions).

What is a reverse mortgage?
How does a reverse mortgage work?
How long do I have to pay back the loan?
When is the balance of a reverse loan due?
Who is behind SeniorClarity and why should I trust your information on reverse mortgages?
What are the qualifications for getting a reverse mortgage loan?
I’ve heard about reverse mortgage pitfalls and scams. Are all reverse loans associated with fraud?
What happens if I outlive the reverse mortgage; can the reverse mortgage lender take my home?
Does getting a reverse mortgage mean that the government will own my home?
Will my loved ones be financially burdened if I get a reverse mortgage?
Who can I contact for more reverse mortgage information?

What is a reverse mortgage?
Reverse mortgages are also known as Home Equity Conversion Mortgages (HECMs), and were originated 1989.Reverse mortgage loans enable you to take a loan out against the home you own to receive tax-free cash. Reverse loans are insured by the Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development. Reverse mortgages are backed by the government, but there are a variety of reverse mortgage lenders to choose from.

How does a reverse mortgage work?
Reverse mortgages are similar to home equity loans—both can provide you with readily available cash. With a reverse mortgage loan, there are no required monthly payments for as long as you stay in the home. You will get tax-free cash (monthly payments, lump sum, a combination of both, or a line of credit). You do not have to pay back the reverse loan or make monthly payments until you move out of the home. Check out more reverse mortgage information including this listing of the step-by-step process involved with getting a HECM.

How long do I have to pay back the loan?
If you get a reverse mortgage loan, you will not have to pay back the loan until the borrower is no longer living in the home. When the loan becomes due, it is paid in full including interest and financed closing costs. You will never owe more than your home’s determined worth at the time the loan is repaid. You’ll still pay property taxes and insurance, and be responsible for home maintenance with a reverse loan, but money will be freed up to allow you to enjoy your lifestyle and ease the burden on family members.

I know there are many disadvantages of reverse mortgages—what are the benefits?
There are many advantages of reverse mortgages and those include the ability to remain independent and maintain active senior living, get tax-free cash, retain home ownership, and prevent burdening family members.

When is the balance of a reverse loan due?
A reverse mortgage loan becomes due when one or more of the following conditions occurs: (a) the last surviving borrower passes away or sells the home; (b) all borrowers permanently move out of the home; (c) the last surviving borrower does not live in the home for 12 consecutive months; (d) the borrower does not to pay property taxes or hazard insurance; (e) the borrower does not maintain the home in reasonable condition.

Who is behind SeniorClarity and why should I trust your information on reverse mortgages?
SeniorClarity was created to give senior citizens and their loved ones accurate facts about the advantages and disadvantages of reverse mortgages. This website is a free public service sponsored by Seniors for Senior Homeowners. SeniorClarity is not subsidized or affiliated with any government agency. Our reverse loan specialists constantly compile information about reverse mortgages, and offer a no-obligation, free consultation to get objective answers to all of your questions about reverse mortgage loans. By getting accurate facts about reverse mortgages, we believe you will be able to avoid reverse mortgage pitfalls and decide whether or not a reverse mortgage is right for you.

What are the qualifications for getting a reverse mortgage loan?
There are relatively few qualifications to get a reverse mortgage. You must be at least 62 years old. There are virtually no income or credit qualifications. Click here to learn more about reverse mortgage rules and qualifications for a reverse mortgage.

I’ve heard about reverse mortgage pitfalls and scams. Are all reverse loans associated with fraud?
No, but senior citizens do need to be cautious with this aspect of estate planning. While there are advantages and disadvantages of reverse mortgages, most dangers of reverse mortgages involve companies that charge exorbitant fees. Most reverse mortgages are comprised of an origination fee, third-party closing costs (such as appraisal, title and escrow), insurance, and a monthly servicing fee. These charges can be paid from the proceeds of the reverse mortgage, so borrowers aren’t immediately burdened. The costs are added to the principal and paid with interest when the reverse loan becomes due.

What happens if I outlive the reverse mortgage; can the reverse mortgage lender take my home?
Absolutely not. You do not need to repay the reverse loan as long as you or another borrower continues to live in the house as the primary residence and keep the taxes paid and hazard insurance in force.

Does getting a reverse mortgage mean that the government will own my home?
No. With a reverse mortgage loan, the borrower retains title to the property. The reverse mortgage lender gives a loan to the borrower. As a homeowner, you will retain your title when getting a reverse mortgage, so you are responsible for the payment of property taxes, hazard insurance and home maintenance—just as you would be with a standard first mortgage or home equity loan.

Will my loved ones be financially burdened if I get a reverse mortgage?
A reverse mortgage or home equity conversion mortgage loan may be repaid from the sale of the home or by refinancing the existing reverse mortgage. All remaining equity belongs to the heirs/estate. You have six months (in some cases up to one year) to repay the reverse mortgage.

Who can I contact for more reverse mortgage information?
SeniorClarity has knowledgeable reverse mortgage specialists that can give you trustworthy information about what is entailed in getting a reverse mortgage loan. Click here to contact us for a free, no-obligation consultation!

Do you have more questions about getting a reverse mortgage? Let our specialists explain reverse mortgages to you without any obligation to apply. Just click here to contact us!