A reverse mortgage is a loan available to seniors 62 and over. It is
used to release the home equity in the property as one lump sum
or periodic amounts according to contract.
Unlike typical mortgages where the loan is amortized in monthly
payments until the obligation with the lender is completely satisfied
(typically in 30 years) in the reverse mortgages, the borrower
doesn't need to make monthly payments and the interest charged
is added to the principal owed.
When the homeowner (borrower) sells the house, passes away,
or moves out for one consecutive year, the reverse mortgage can
be paid off by the proceeds of the sale, or refinancing by the heirs
of the homeowner's state. If there is a gain, the owners or heirs
will receive the proceeds of the sale. If there is a loss, the
insurance makes up the difference.
Who qualifies for a reverse mortgage?
- A homeowner who is over 62 years of age or over.
- Under new rules homeowners have to show they have sufficient
income to cover expenses such as property taxes and
- There are no credit requirements.
- Borrower must get HUD approved counseling. (1 hour by phone
or in person)
- Only certain types of property qualify. (lower-value mobile homes
do not qualify)
- As a requirement the owner must pay off any existing mortgages
with the proceeds from the reverse mortgage loan.
- The funds can be used for any purpose.
- Must own and occupy the home as primary residence.
- The loan amount is based on the age of the youngest person in
What are the advantages of getting a reverse mortgage?
- The borrower retains ownership to the home and can Will the
property to their heirs.
- The monthly payments made to the borrower are not taxable.
- The borrower does not have to repay the loan.
- Allows the homeowner to maintain their life style by providing a
monthly income. See "10 good reasons why you should get a
|*This information is subject
to sudden changes.
Please consult with your
Reverse Mortgage Advisor
at FundRite Mortgage for
advice on your
and according to any new
laws or rules in place.
Homeowners who are over 62 years
Here's a program that allows you
to get money from your home
equity, stay in your home and you
don't have to make monthly
Please read on..