Frequently asked questions… answered!
1. Can I qualify for a Reverse Mortgage?
To be eligible you must be a homeowner 62 years of age or older, own and live in the home as your primary residence, have equity in your home, and participate in a financial assessment.
2. How much can I borrow with a Reverse Mortgage?
The amount you can borrow depends on your age, the current interest rate, the appraised value of your home, the home’s sales price or FHA’s mortgage limits, and a financial assessment of your income and credit histories.
3. When does my Reverse Mortgage become due and payable?
Unlike a traditional home equity loan or second mortgage, repayment isn’t due until you decide to sell the home, no longer use the home as your primary residence, or fail to meet the requirements of the mortgage.
Requirements of the mortgage include:
- Paying property taxes or hazard insurance
- Maintaining the property
Often times there are also other agreed upon obligations. Please discuss this with your OneTrust Home Loans Reverse Mortgage specialist.
4. What is the difference between a Reverse Mortgage and a home equity line of credit?
Both mortgage options result in you receiving funds from the equity in your home. With a home equity line of credit, you must make monthly mortgage payments. With a Reverse Mortgage you do not need to make monthly mortgage payments for as long as you’re in the home and meet the requirements of the mortgage. Keep in mind, homeowners are required to pay property taxes and homeowners insurance premiums.
5. Do I remain on the title of my house?
Yes, you do!
6. Will I still have an estate that I can leave to my heirs?
When you sell your home, you or your estate will repay the funds you received from the Reverse Mortgage plus interest and other fees to the lender. Your remaining equity in your home belongs to you or to your heirs.
7. How can I use my equity with a Reverse Mortgage?
You have choices on how to receive the funds from your built-up equity:
- Lump Sum – a lump sum amount of cash when the loan closes
- Tenure Payments – fixed payment amounts as long as you live in the home
- Term Payments – a specific amount paid monthly for a fixed number of years
- Line of Credit – you have the ability to draw on your equity in any amount until the line of credit is exhausted
8. How can I use the funds I receive from a Reverse Mortgage?
You can use the funds to help you meet your needs, such as to make home improvements, pay off medical expenses, supplement your monthly income, or use it to pay any unexpected expenses.
9. Can I owe more than my house is worth?
All Reverse Mortgage products are considered “non-recourse” loans, which simply means you can never owe more than your home is worth, regardless of the loan value.
Do you have more questions?
Go ahead and give us a call! We’d be happy to answer any and all questions you may have.