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More Reverse Mortgage FAQ’s Answered!

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Today, I will answer even more frequently asked questions about reverse mortgages. Learn what an MIP is, how much you can receive from a reverse mortgage loan, what a Right of Rescission is and much more. 

Are there other reverse mortgage questions you need answered? I can answer them for you. Leave comments below or send a message here. 

Even More Reverse Mortgage Questions

1. Does my home qualify for a reverse mortgage?

  • For a home to qualify for a reverse mortgage loan, they must fall under the FHA’s (Federal Housing Administration) property standards and flood requirements. The homes that do qualify are single family homes, 2-4 unit properties, manufactured homes that meet FHA standards and HUD-approved condominium projects. Also, be advised the home you take out a reverse mortgage on is your permanent residence. If you are trying to take out a reverse mortgage on a 2-4 unit property, then you must be occupying at least one of the units.

2. How much money can I receive from a reverse mortgage?

  • The amount of money that you receive on a reverse mortgage depends on different factors; including your age, the appraised home value, and interest rates. The older you are and the more value there is in your home means you will receive more money.

3. Why is there a Mortgage Insurance Premium?

  • With your reverse mortgage, you are charged a Mortgage Insurance Premium (MIP), which is the up-front cost for mortgage insurance that borrowers need to pay. The MIP is put into place to protect the borrowers, in case their lenders were to go out of business, then the borrowers are still able to receive their payments without interruption.

4. What is a maturity event?

  • A benefit of a reverse mortgage is that there is no maturity date for your loan. However, a maturity event is any event that will make your loan due. The following events will force your reverse mortgage loan into repayment:
    • When the borrower is no longer paying taxes and insurance on the property.
    • When the borrower is no longer keeping up with the maintenance on the home.
    • When the last borrower on the loan passes away.
    • When the borrowers are no longer living in the property.
      • If for any reason you need to leave the home temporarily, the banks will give you up to 12 months before the loan will go into repayment.

5. What is a Right of Rescission?

  • At the closing of your loan, you will receive a Notice of the Right of Recission indicating that you have a right to rescind your reverse mortgage loan, if that is your choice. If you no longer want to go through with the reverse mortgage, then you must contact your lender within three (3) days of signing the loan. During the three day rescission period, the lender is not allowed to accrue interest on the loan. Interest will begin to be accrued one day after the loan has been disbursed.


Interested in doing a reverse mortgage? Contact a Senior Advisor today at 1-888-808-8486.


Read Related Articles:

5 W’s of Reverse Mortgages

Top 5 Reverse Mortgage Questions


Image courtesy of [Stuart Miles] / FreeDigitalPhotos.net

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