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UNDERSTANDING REVERSE
MORTGAGES Your home is many things, safety, independence, and memories to name a few. Now, with a reverse mortgage, it can also be a source of money. A reverse mortgage can meet financial needs and insure that you can stay in your home as long as you choose. What is so unique about this program? Will this loan affect my Social Security or Medicare? Will I have to pay income tax on the money I receive? Will I have to pay an application fee?
What will I owe?Do I have to own my home free and clear? Who will own my home if I get a reverse mortgage? Are there any restrictions on how I use the funds?Should I shop for the lowest interest rate? What questions should I ask a potential lender? How can I be sure it is right for me?
What is a reverse
mortgage?
top You make no payments. It is a loan in reverse. Instead of making payments, you receive them.
Will this loan
affect my Social Security or Medicare?
top No. The money is considered proceeds of a loan and not taxable.
How much do I
qualify for?
top Most lenders will charge a fee at application for the appraisal. Many customers take an initial draw at closing to reimburse this fee.
When is the loan
due?
top The amount of money disbursed to you plus interest and fees accrued.
Do I have to own
my home free and clear?
top You remain the owner.
Can I sell
whenever I want?
top No – It’s your money – you decide.
Should I shop for
the lowest interest rate?
top Ask for a Good Faith Estimate to compare costs. Ask if they process and underwrite their loans in state (out of state processing and underwriting takes much longer). Ask how long they have been working with reverse mortgages. You want an experienced lender.
Is it hard to
qualify?
top A meeting with a HUD approved housing agency is required. They will sit down with you (and your family if you like), to explain this program so you can make an informed decision. |
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