What is a Reverse Mortgage?
A Reverse Mortgage is a loan that allows homeowners age 62 or better to access a portion of the equity in their home. The proceeds of the loan are generally tax-free*, and borrowers are able to use the funds however they choose- whether it’s to pay off debt, cover medical expenses, make improvements to their home, or create a line of credit for future expenses.
What are some requirements for a Reverse Mortgage?
- Age 62 or better
- Own your own property
- Occupy the property as your primary residence
How much money can I get from a Reverse Mortgage?
Loan amounts vary and are based on the type of Reverse Mortgage, the age of the borrower, the appraised value of the home and current interest rates.
How is it different from a Home Equity Loan?
With a home equity loan, borrowers must have sufficient income-versus-debt ratio to qualify, and they are required to make monthly principal and interest mortgage payments.
A Reverse Mortgage is different in that it requires no monthly principal and interest mortgage payments and may make payments to the borrower.
What if I have an existing mortgage?
You may be eligible even if you owe money on an existing mortgage. However, the existing mortgage balance must be paid off at closing. You can choose to pay off the balance with proceeds from the Reverse Mortgage or another source.