Q: Does the bank take the house?
A: No. A reverse mortgage is only a loan on the home. The title remains in the
name and control of the borrower at all times.
Q: When is a reverse mortgage typically repaid?
A: When the homeowner sells the property, moves out, or is deceased, but it
can be repaid at anytime. If there
are two homeowners and one passes away, the loan continues as normal with the
second homeowner.
Q: What is repaid to the bank?
A: Only the amount of money paid to or on behalf of the homeowner, including
interest that has accrued on the loan.
Q: How is the loan repaid?
A: Typically, when the homeowner, estate or heirs sell the home, the escrow
agent handles the transfer. Alternatively, the loan can be repaid with funds
from any source, including refinancing into a traditional mortgage. This is
often the case if the heirs wish to keep the home.
Q: What are the homeowners’ obligations?
A: They must pay their property taxes and homeowner’s insurance, and continue
to occupy the property. The home must be kept in a basic livable condition.
Q: What are the options for receiving reverse mortgage funds?
A: ● Lump sum up front - often used to pay off an existing mortgage
●
Line of credit available at any time and in any amount up to your credit
limit
●
Tenure - a fixed monthly payment for as long as you live in the home
●
Term - a monthly fixed amount for a predetermined period of time
●
Any combination of these choices
Q: What happens if all the funds from reverse mortgage are used up?
A: Nothing. The reverse mortgage simply continues and remains in
place. There are no mortgage payments due. If you are concerned about running
out of money, choose the tenure option.
Q: What are the options if all of the funds are spent?
A: ● Continue to live in the house, payment-free.
●
Sell the house (and pocket the net proceeds).
●
Refinance the reverse mortgage and get an additional money, if you qualify.
Q: What if the reverse mortgage balance
overtakes the value of my home?
A: You can never owe more than the value of the home regardless of loan
balance because reverse mortgages are "non-recourse" loans. In this unlikely
scenario, you can continue to live in your home payment-free. The lender (or
FHA) takes on the risk that the mortgage balance exceeds the value of the
property.
Q: What if I already have a mortgage?
A: The funds from a new reverse mortgage must first be used to pay off any
existing mortgage, which will eliminate your current mortgage payment. The
amount of money remaining from the reverse mortgage is then available to you.
Q: Can I get a reverse mortgage on my vacation home?
A: To be eligible, the home must be your primary residence. Vacation property
is not eligible.
Q: What if I have set up a Trust?
A: A home in a trust will usually qualify for a reverse mortgage. The trust
documents must be reviewed by the lender.
Q: Is the money from a reverse mortgage taxable?
A: The Internal Revenue Service usually considers reverse mortgage money to be
loan advances and not taxable income. Please consult your tax advisor.
Q: Can the interest charged on my reverse mortgage loan be deducted for tax
purposes?
A: Usually, home mortgage interest is deductible in the year that it is
actually paid. If you need the tax deduction, you may pay the interest on the
reverse mortgage. Please consult your tax advisor.
Q: How does the money from a reverse
mortgage affect Social Security, Medicare or pension benefits?
A: A reverse mortgage usually does not affect these benefits. For your
specific situation, we recommend that you consult your benefits provider.
Q: If I take out a reverse mortgage will my Supplemental Social Security (SSI)
or Medicaid benefits be affected?
A: As long as any cash advances are fully spent every month, a reverse
mortgage will not usually affect these or most other "means tested" benefits.
Program rules change periodically so check with the local Area Agency on Aging
or benefits provider.
Q: What are the closing costs?
A: Origination, title and escrow fees. These costs are usually paid with loan
proceeds, not out-of-pocket. Please request a free quote to see the closing
costs for your circumstances.
Q: Where can I get more reading material on reverse mortgages?
A: See Reverse Mortgage Reading MaterialQ: How do I get my other questions
answered?
A: Call us (toll free) at 1-866-311-3360 or request a quote
Free Reverse Mortgage Benefit Statement
We invite you to request a free reverse mortgage quote so that you can review the top programs for your situation. Complete the form below and we will thoroughly review every California reverse mortgage program send you a detailed comparison within two business days. Feel free to call anytime at (toll free) 1-866-311-3360.
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