Frequently Asked Questions about Reverse Mortgages
In the reverse mortgage process it is very common for questions to arise that are similar in nature from one customer to another. Below I have listed some of the frequently asked questions that we receive and some factual responses for your information.
- What do I need to qualify for a reverse mortgage?
- Be 62 years of age or older
- Own your home. Customers with existing mortgages also may qualify
- Live in your home as your primary residence.
- How much money do I qualify for with a reverse mortgage?
- The dollar amount each customer qualifies for depends on a variety of factors. Your age, current market rates, the value of your home, the type of reverse mortgage loan you choose, and the FHA lending limits in your area all come into play.
- How is a reverse mortgage loan different from a traditional mortgage loan?
- With a traditional mortgage loan you make monthly payments based on the amount you borrow and with a reverse mortgage you don’t need to make monthly payments on the loan as long as you stay in the home. With a reverse mortgage your balance increases each time a draw is made and the interest on the loan is added to the balance. You repay the balance when you sell or move from your home.
- What kind of interest rates are available?
- Reverse mortgage loans are available in both fixed rates and variable rates.
- What are the fees on a reverse mortgage loan?
- The fees on a reverse mortgage loan typically include closing costs, a mortgage insurance premium, and an origination fee.
- Does the bank take title or own my home if I get a reverse mortgage?
- The answer to both is NO. You retain ownership of your home. You are required to pay the taxes and insurance on your home and maintain your home to FHA standards.
- What will I owe when the loan is due?
- When the loan is due, the loan balance is required to be repaid, including interest and fees. Most commonly, the home is sold to pay off the outstanding balance of the loan.
If you happen to have any additional questions that weren’t addressed, please feel free to give us a call! I look forward to speaking with you soon.