Reverse Mortgage
Available to seniors 62 years or older, a reverse mortgage is a loan that allows you to convert the equity in your home into tax-free income* without having to give up title to the home. This type of loan enables you to supplement your retirement income, eliminate mortgage payments and help pay for unexpected expenses and does not need to be repaid until you stop living in the home.
How do I receive the money?
There are several ways to receive the proceeds of a reverse mortgage and you can mix and match as needed.
- Lump sum - a lump sum of cash at closing
- Tenure - equal monthly payments as long as you live in the home
- Term - equal monthly payments for a fixed number of years
- Line of Credit - take any amount you please at any time until the line of credit is exhausted
How can I use the money?
As the borrower, you have the option to use the funds however you choose.
You can:
- pay for medical care, prescription drugs and in-home care
- make home improvements and repairs
- modify your home for better accessibility
- travel to visit family and friends
- contribute to a grandchild’s college education
Borrower Requirements
All borrowers must:
- be 62 years of age or older
- be listed on title
- occupy the property as principal residence
The mortgage amount depends on:
- age of the youngest borrower
- current interest rate
- lesser of appraised value or the mortgage limit
Financial Requirements
- no income or credit qualifications are required of the borrower
- no repayment as long as the property is your principal residence
- closing costs may be financed in the mortgage
Property Requirements
- single family home or 1-4 unit home with one unit occupied by the borrower
- HUD-approved condominium
- manufactured home that meets FHA requirements
Though a reverse mortgage can do quite a bit for the over 62 year old homeowner if applied properly, it should be considered carefully before proceeding, as with any financial vehicle.
*consult your tax advisor