FAQ

A reverse mortgage line of credit offers greater flexibility in repayment - no monthly mortgage payments are required. You must continue to pay property taxes, homeowners insurance and maintain the home.

As long as the terms of the loan are met, a reverse mortgage does not have to be repaid until the home is no longer the primary residence of at least one borrower or the home is sold.

Usually, the last surviving borrower or their estate sells the home to repay the loan. It can also be repaid from other assets, proceeds from a life insurance policy, or a loan refinance.

Reverse mortgages have a non-recourse feature, which means that the total amount that you owe can never exceed the appraised value of your home.

However, if your home increases in value, all equity that remains once the reverse mortgage is paid off belongs to you and your estate.

If you permanently leave the home, the loan servicer will issue a Repayment Notice that states the mortgage is due and payable. The notice must also provide the amount of the outstanding balance and list the following options: the debt must be paid in full; the property must be sold for the lesser of the debt, or the appraised value; or, good marketable title to the property must be deeded to the mortgagee. Typically, this is often just a simple process of refinancing the home into a traditional forward mortgage and repaying the reverse mortgage.

In addition to interest, the costs can include a property appraisal fee, origination fee, closing costs, servicing fee and a modest charge for independent counseling. While closing costs vary based upon the type and size of the loan, they’re similar to those for any traditional mortgage.

You can roll most of the up-front costs into the loan, so out-of-pocket expense can be minimized and you can reduce your costs by taking a lower amount of proceeds that are available to you. We will give you a detailed cost breakdown, and explain the different interest and pricing options available.

As a reverse mortgage borrower, you can enjoy all the benefits a reverse mortgage can bring to your life, including making no monthly mortgage payments. However, you must, continue to live in the home as your primary residence; pay your homeowner’s insurance, real estate taxes, and any applicable HOA or condominium assessments and fees, maintain your home; and, comply with the obligations in the security instruments.

Since payments are not being made, it’s common for some reverse mortgage borrowers to feel like they no longer own their home. This is not the case. A reverse mortgage is just like any other mortgage, meaning that there is a lien on your house that has to be paid back at some time, but you still own your home and your name remains on the title.

Even though you are not making any mortgage payments, you are still responsible for paying property taxes and homeowner’s insurance and maintaining your home.

You may also be concerned that you could somehow lose your home if you obtain a reverse mortgage. As long as you continue to manage your responsibilities – live in the home as your primary residence, pay your property taxes and homeowner’s insurance, and keep your home well maintained, the lender will not be able to foreclose on your home, even if the unpaid balance exceeds the value of your home. If you do not meet these obligations, the loan servicer will attempt to contact you to resolve the situation. We highly recommend you keep an open line of communication with the servicer when any issues arise.

And remember, reverse mortgages have a non-recourse feature, which means that the total amount owed can never exceed the appraised value of your home. If you permanently leave the home a Repayment Notice will be issued by the loan servicer. The repayment notice must state that the mortgage is due and payable, provide the amount of the outstanding balance, and list the following options: the debt must be paid in full; the property must be sold for the lesser of the debt, or the appraised value; or, good marketable title to the property must be deeded to the mortgagee. Typically, this is often just a simple process of refinancing the reverse mortgage into a traditional forward mortgage and repaying the reverse mortgage.

Another common concern is that there will be nothing left of your estate to leave to your heirs once you pass away, or worse, you will end up saddling them with even more debt. The non-recourse feature assures that you and your estate will never owe more than the value of your house. In the event the debt exceeds the value of the home, your heirs simply walk away. This is a worst-case scenario.

No. A reverse mortgage is what is called a non-recourse loan. This means the borrower will not owe more than the home is worth at the time it is sold, and there is no recourse for any deficiency other than the home. Your heirs can sell the home and pay off the balance and any remaining equity can go to the heirs, NOT THE BANK!

You must be 62 (Jumbo reverse, 55) years of age or older, you must own your own home, (primary residence) and you must agree to pay property taxes and insurance, and to ensure there is proper maintenance of your home. You will also be required to meet with a HUD counselor (by phone or in person) before completing your reverse mortgage application. This is a federally mandated feature of the reverse mortgage process and is designed for your protection.

Absolutely. If the home is not paid off, the proceeds from the reverse mortgage must first be used to pay off any existing mortgage.