Tim Murphy | Mortgage Loan Originator | NMLS# 1508452
What is a Reverse Mortgage?
A Reverse Mortgage or Home Equity Conversion Mortgage (HECM) is a loan insured by the Federal Housing Administration (FHA) for homeowners age 62+.
What are the basic requirements to secure a Reverse Mortgage?
You may be eligible for a Reverse Mortgage if you are at least 62 years old, own and have sufficient equity in your home, and live in the home as your primary residence.
What if I still owe money on a first or second mortgage?
Proceeds from your Reverse Mortgage would first be used to pay off any existing mortgage(s). This means the balance of your existing mortgage(s) would be added to the balance of your Reverse Mortgage.
How much money can I get?
The specific amount depends on several factors, including your age, the type of Reverse Mortgage you select, the value of your home, prevailing interest rates and FHA lending limits.
How can I receive the funds from a Reverse Mortgage?
You can take your funds as a lump sum, line of credit, monthly advances, or any combination of these.
Will a Reverse Mortgage affect my government benefits?
The funds from a Reverse Mortgage generally do not affect regular Social Security or Medicare benefits. However, needs-based benefits such as Medicaid and Supplemental Security Income (SSI), may be impacted. We can provide additional general information, but you should contact a government benefits specialist about your particular situation. Visit www.ssa.gov.
How can I use the proceeds?
You can use the proceeds however you chose.
Will I have to pay any fees?
With the exception of a fee for government-required HECM counseling, most of the fees associated with a HECM can be financed with your loan so there is no immediate out-of-pocket expense. The costs are added to the loan amount and paid along with the accrued interest when the loan becomes due.
When does the loan become due?
There are a few "trigger events" that will cause the loan to become due. The loan is only due when you move out permanently, sell the home, or pass away.
What has to be repaid when the loan becomes due?
You'll repay the loan balance, any fees that have been added, and the accrued interest. Homeowners (or their heirs) usually choose to do this through the sale of the home. Repaying the loan with other assets or by refinancing through a conventional mortgage is also an option, if you or your heirs want to keep the home.
What are the ongoing obligations of a Reverse Mortgage borrower?
Borrowers are required to occupy the home as their primary residence, keep the property in good repair and pay property taxes, homeowners insurance, and any other property charges such as HOA dues or flood insurance.