Frequently Asked Questions
Yes, a Reverse Mortgage is like a debt consolidating refinance, with the benefit of no mortgage payment. You can pay off:
- Existing debt
- Existing Mortgage Balance
The exact amount depends on the following:
- Your Age
- The type of Reverse Mortgage selected
- Current Interest rates
- Appraised value of your home
As a safety feature, HUD regulates the amount of money that can be withdrawn during the first 12 months of your Reverse Mortgage. After 12 months, the remaining funds are available to use anytime. This is to help preserve and grow your home equity for a longer period of time.
- Borrower(s) must be 62 years of age or older to be on title
- The home must be your Primary Residence
- Meet with a HUD (Department of Housing and Urban Development) Reverse Mortgage Counselor
There are several options for how you can receive your funds.
- Line of credit (access funds when needed)
- Lump sum
- Combination of all of the above
- With a home equity loan or home equity line of credit, you must make monthly principal and interest payments. With the Reverse Mortgage there are no monthly payments.
- With a home equity loan or home equity line of credit the unused line of credit does not grow. With a Reverse Mortgage the unused line of credit will increase each month. The growth rate is equal to the sum of the interest rate plus the annual mortgage insurance premium rate being charged on your loan.
- With a home equity loan or home equity line of credit the bank can arbitrarily freeze or reduce your line of credit. With a Reverse Mortgage this will never happen.