With a Reverse Mortgage, the lender makes payments to the homeowner based on the home’s equity. As the loan balance grows, the equity in the home decreases. The loan is repaid, typically with the sale of the home, when the borrower no longer lives there as their primary residence.

The amount you can borrow with a Reverse Mortgage depends on several factors, including your age, the value of your home, current interest rates, and the amount of equity you have. Older borrowers and those with more equity may qualify for higher loan amounts.

To qualify for a Reverse Mortgage, borrowers must be at least 62 years old, live in the home as their primary residence, and have substantial equity in the property. The home must also meet FHA property standards. Income, credit history, and the ability to maintain the property will be reviewed during the application process.

‍

Yes, there are different types of Reverse Mortgages. Here’s an overview:

• Home Equity Conversion Mortgage (HECM): The most common type of Reverse Mortgage, insured by the Federal Housing Administration (FHA). It offers flexible payment options and is available to homeowners 62 and older.
• Proprietary Reverse Mortgage: These are private loans offered by lenders for homes that may exceed the value limits of HECMs. They are often used for high-value homes.
• Single-Purpose Reverse Mortgage: This type is offered by some state and local governments and non-profit organizations, designed for a specific purpose like home repairs or paying property taxes. They typically have lower costs but may have restrictions on how the loan proceeds can be used.

Yes, with a Reverse Mortgage, you retain ownership of your home. A lien is placed on the property, but you remain the owner as long as you comply with the loan terms, such as maintaining the property, paying property taxes, and keeping homeowners' insurance current.

As long as you comply with the loan terms—such as living in the home, maintaining it, and paying property taxes and insurance—you cannot lose your home.

Reverse Mortgages are non-recourse loans, meaning you or your heirs will never owe more than the home’s value, even if the loan balance exceeds that amount. The home’s sale proceeds will cover the loan repayment, and any remaining debt is forgiven.

A Reverse Mortgage needs to be repaid when the homeowner sells the home, moves out for more than 12 months, or passes away. At that time, the loan balance, including interest and fees, is typically paid off from the proceeds of the home sale. If heirs wish to keep the home, they can pay off the loan balance.

No, the proceeds from a Reverse Mortgage are generally not considered taxable income. The funds are considered loan advances rather than income, so they are not subject to income tax. However, it’s always a good idea to consult a tax advisor for guidance specific to your situation.

A Reverse Mortgage allows you to access home equity without monthly payments, and repayment is deferred until you sell the home or no longer live there. A Home Equity Loan, on the other hand, requires monthly payments, and the loan must be repaid over a set term.