It is a type of loan available to seniors 55 years or older, where the equity you have in your primary residence can be converted into accessible liquid funds. You do not have to make monthly payments to the lender. The loan is instead due to be paid back at a “maturity event.”

• You need to be 55 years old or older (though a non-borrowing spouse can be younger).
• You need to own your home with sufficient equity.
• You need to be living in that home as your primary residence.

You can choose to receive payments from a reverse mortgage loan in various ways. There may be a lump sum payment, either for the full amount or a partial amount. You can opt to receive monthly payments from the lender. A line of credit can be established, or you can choose some hybrid version of these.

You will continue to own the property throughout the life of the loan. When the loan becomes due, you or your heirs can choose to sell the home to repay the loan balance, pay the balance due out of pocket, or refinance the home to pay off the loan balance.

There are several factors which are considered when determining loan proceeds for a reverse mortgage. Age is a factor, so an older borrower will generally receive a larger amount compared to a younger one, holding other variables constant.

Other factors include the amount of equity you have in the home, the remaining mortgage amount on that property (if any), and current market rates for reverse mortgages.

While there is no regular mortgage payment required, you will have certain regular costs that are obligatory. These include all property charges such as property taxes, homeowner’s insurance, any HOA payments, all maintenance costs, etc. Although not required, borrowers may choose to make mortgage payments during the course of the loan. Your loan officer can provide more details.

All of our reverse mortgages are non-recourse. This means that even if the loan balance exceeds the value of the home at the time the balance is due, you or your heirs will not owe more than the value of the home. This is why FHA collects mortgage insurance premiums.

“FHA guarantees that neither the borrower nor their heirs will owe more than the home is worth at the time it is sold” -FHA Guidelines

A reverse mortgage loan comes due not based on a predetermined timeframe, but based on “maturity events.” These include the following:

• The property is no longer the primary residence of at least one borrower
• The last borrower fails to occupy the property for 12 consecutive months (typically this is for a higher level of care)
• The borrower does not fulfill their obligations under the terms of the loan. This includes paying all property charges including property taxes, homeowner’s insurance, any HOA payments, all maintenance costs, etc.

There may be a deferral available for non-borrowing spouses. Your loan officer can provide more information.