Your Reverse Mortgage Loan Fundamentals
1. THE BASICS
A Reverse Mortgage is a special type of loan allowing homeowners ages 62 and up to convert the equity in their primary residence into cash. Borrowers can receive their money in a lump sum, in fixed monthly payments, as a line of credit or any combination of these. Instead of paying off the loan in monthly installments to a lender, the bank PAYS YOU.
2. I DON’T WANT TO LOSE MY HOUSE!
Borrowers NEVER give up ownership of their home. The loan is repaid only when the borrower moves, sells the home or passes away – most often, using proceeds from the sale of the property.
3. WHO QUALIFIES?
There are only two qualification requirements: You must be at least 62 years old and own your home. You may be eligible even if you still owe money on a first or second mortgage. In fact, many of our members use their Reverse Mortgage to pay off their existing mortgage.
4. I CAN USE THE FUNDS HOWEVER I WANT?
Funds from a Reverse Mortgage can be used for ANYTHING: debt consolidation, daily expenses, regular and emergency medical bills, home repairs and improvements, travel, big-ticket purchases, gifts, etc. There are no restrictions on spending your Reverse Mortgage money.
5. HOW MUCH CAN I BORROW?
Several factors determine how much you can receive through a Reverse Mortgage: your age, current interest rates and either the appraised value of your home or the FHA’s mortgage lending limits for your area, whichever is less. As a rule of thumb, the more valuable your home is, the older you are and the lower the interest rate, the more you can borrow.