Background  |  Steps to a Reverse Mortgage  |  Counseling 

OK, What Is A Reverse Mortgage?

Definition: A Reverse Mortgage is a unique financial tool that enables homeowners ages 62 and over to tap into their home's equity, receiving either a monthly income, lump sum of cash or a line of credit. There are no income or credit qualifications and there is no repayment until the homeowner permanently leaves the home. You retain full ownership of the property.

Qualifications: Applicant(s) must be at least 62 years of age. In many cases, you may use the Reverse Mortgage to pay off existing liens or mortgages, which eliminates your monthly loan payments. You must also live in your home as your primary residence. Mobile homes have specific requirements that must be met in order to be eligible for Reverse Mortgages. Please contact us for a list of these requirements.

Determination of Loan Amount: The loan amount is based on the home's value, the number and age of the youngest homeowner, the current interest rate and the maximum allowable lending limit under the program chosen. The maximum allowable lending limit varies depending on the Reverse Mortgage program selected and the market in which the property is located.

Counseling: For your protection, all borrowers are required to receive free counseling from a third party counseling agency prior to applying for a reverse mortgage. We have a list of counselors in your area. In most instances, counseling may be completed by telephone. See What is Counseling? for more information.

Payment Plans: You can choose from several payment plan options:

• Tenure: You receive a monthly check for as long as you live in the home.

• Line of Credit: You can draw up to a maximum amount at the times and in the amounts of the your choosing.

• Lump Sum Cash Advance: A lump sum of cash distributed to you at closing.

• Term: You receive a defined amount each month for a specified term. This is useful if you want or need more cash each month and/or do not expect to remain in your home for the rest of your life. When the defined term is up, payments will stop however the loan is still not due until the you cease to occupy the home as your primary residence.

• Modified: You may opt to receive funds in a combination of the above options.

Continued    1    2    3    4    Next    Back