Your Questions Answered About Reverse Mortgages!

Every day, our Senior Advisors receive questions about reverse mortgages asked by borrowers, potential clients and their families. Our goal is to keep our clients well-informed about the reverse mortgage process and to free their minds of any concerns and worries about the program. Reverse mortgages can be essential to the retirement planning goals for many seniors, and provide them the financial freedom that they are looking for.

Here are some of the more popular questions that have been answered by our Senior Advisors. If you’re interested in learning more, contact us at 1-888-808-8486.

 

Can heirs/children inherit a home that has a reverse mortgage?

Yes, it is possible for heirs/children to inherit a home that has a reverse mortgage. The home can hold sentimental value for many families and some prefer to keep it, so when it comes to a reverse mortgage, some borrowers’ and their families may fear losing home. However, to be able to keep the home, the heirs/children have the option to refinance the loan and pay back the loan based on the terms.

 

What is the difference between a traditional mortgage and a reverse mortgage?

With a reverse mortgage, it allows senior homeowners to borrow against the equity in their home to be able to used as they please. A traditional mortgage and a reverse mortgage are similar in that there are still certain requirements that the borrowers should meet, such as continue to pay the property taxes and home insurance on the property in question.

One of the most important difference between a traditional mortgage and a reverse mortgage is that with a reverse mortgage, borrowers are not required to make monthly payments, as long as they continue to live in the home and meet the stipulations of the loan. Reverse mortgages also do not have a maturity date, as typical to a regular reverse mortgage, and instead they have a maturity event which causes the loan to become due.

 

What are the qualifications needed for a reverse mortgage?

Because a reverse mortgage is a specialized loan, there are certain qualifications that borrowers must meet. The qualifications include:

1. At least one of the borrowers must be 62 years of age or older.
2. They must own the home and live their as their primary residence.
3. There must be sufficient equity in the home for the reverse mortgage to make sense.
4. Borrowers must attend the reverse mortgage counseling session.

 

How is the reverse mortgage loan calculated?

A reverse mortgage is calculated based on the following factors:

1. The age of the youngest borrower.
2. The calculated market value on the home.

Check this article to learn more about how a reverse mortgage loan is calculated or visit this reverse mortgage calculator site to receive an estimate.

 

When do you pay back the reverse mortgage loan?

Unlike traditional mortgages, reverse mortgages do not have a maturity date. Instead, there is a maturity event that must takes place before the loan can become due.

The maturity event can be any of these following actions:

1. The borrower no longer lives in the home as their primary residence.
2. The last borrower on the loan passes away.
3. The home is sold or transferred.
4. The borrower is no longer keeping up with property taxes, home insurance or HOA fees on the home.
5. The borrower is no longer keeping up with regular maintenance on the home per FHA regulations.

A reverse mortgage can be a source of financial support for senior homeowners. To learn more about this product, contact one of our Senior Advisors at 1-888-808-8486.