Q. Who qualifies for a Reverse Mortgage?
To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years
of age or older, own your home outright, or have a low mortgage balance live in the
home. You also have to prove that you earn enough income to pay for your property
tax and insurance.
Q. What if I have a joint mortgage with my younger spouse?
A. Your spouse must be at least 62 years of age for you both to qualify for a RM. In
general the older you are, the greater amount of money you would receive from a RM.
Q. Does my home have to have equity in order to get a RM?
A. Yes, but this questions would be better answered by your Reverse Mortgage
Consultant, since rules constantly change accordingly to the real estate markets and
Q. Do I need to have a minimum income to qualify for a RM?
A. Yes. Under new rules homeowners will have to show they have sufficient income
to cover expenses such as property taxes and homeowners insurance.
Q. Do I need to maintain my home in reasonable good shape to continue
qualifying for a RM
A. Yes, this is a requirement
Q. Will I have to pay taxes on the money I'm receiving with a RM?
A. No, this income is not taxable.
Q. What happens after the borrower, moves, sells or passes away?
A. The heirs will have a these options: 1).Refinance the home and keep it, 2). Sell the
home and cash out the equity, or 3). Turn the home over to the lender. If the property
is turned over to the lender the borrower or the heirs have no more claim to the
property or equity in the property
Q. Will receiving money from a RM affect my Social Security and Medicare
A. No, receiving money from a RM program will not affect your SS and Medicare
benefits. However, if you receive Medicaid or SSI, the money from RM will be
counted as liquid assets.
Q. Can I receive a lump sum instead of monthly payments?
A. Yes, you can. Your other options are to receive a monthly payment or to establish a
line of credit (like a credit card).
In fact, you can select from five payment plans:
Tenure- equal monthly payments as long as at least one borrower lives and
continues to occupy the property as a principal residence.
Term- equal monthly payments for a fixed period of months selected.
Line of Credit- unscheduled payments or in installments, at times and in an amount
of your choosing until the line of credit is exhausted.
Modified Tenure- combination of line of credit and scheduled monthly payments for
as long as you remain in the home.
Modified Term- combination of line of credit plus monthly payments for a fixed
period of months selected by the borrower
Q. Are there limitations on how I will use the money from a RM?
A. No, there are not limitations, you can use your money from a RM for any purpose,
including the purchase of a second home. Please consult your Reverse Mortgage
Advisor for any law changes.
Q. How much money can I get from my home?
A. The amount you may borrower will depend on:
You can borrow more with the HECM Standard option. In addition, the more valuable
- Age of the youngest borrower
- Current interest rate
- Lesser of appraised value or the HECM FHA mortgage limit of $625,500 or the
sales price; and
- Initial Mortgage Insurance Premium--your choices are HECM Standard or
your home is, the older you are, and the lower the interest rate, the more you can
borrow. If there is more than one borrower, the age of the youngest borrower is used
to determine the amount you can borrow.
|-- All Rights Reserved --
|*This information is subject
to sudden changes.
Please consult with your
Reverse Mortgage Advisor
at Mark 1 Mortgage for
advice on your
and according to any new
laws or rules in place.
Most Common Questions & Answers *