Available to homeowners who are 62 years of age or older, a Reverse Mortgage allows senior homeowners to borrow money by tapping into their home equity. Unlike a traditional (or forward) mortgage, with a Reverse Mortgage, the lender will make payments to the borrower based on their selection of how they want to receive their funds – via a monthly payment, one lump sum payment at closing, a line of credit, or a combination of these. The money can be used for any purpose, such as paying off debts, making home improvements, or supplementing income. The homeowner typically won't need to pay back the loan as long as they continue to occupy the property as their primary residence. Instead, the loan will need to be repaid when the homeowner passes away, sells the home, moves, or doesn't meet the terms of the loan in staying current on property taxes, HOA dues, homeowner's insurance and maintaining the property in good condition.

HECMs are insured by the Federal Housing Agency (FHA) and can give homeowners additional financial security while allowing them to stay in their home. Payments can be issued as a single disbursement, a fixed monthly payment, or as a line of credit. Borrowers must be at least 62 years of age and are required to meet with a government approved housing counselor prior to loan approval.

Unlike traditional mortgages where the borrower is obligated to make mortgage payments to the lender, a Reverse Mortgage provides the borrower 4 options:

When the homeowner passes on, sells the home, or moves, the loan will need to be repaid. This is usually done by using the proceeds from the home sale to repay the loan. If your heirs do not wish to sell your home, they can choose to refinance or simply pay off the mortgage without selling.

HECMs, which are backed by the FHA, are considered non-recourse loans. This means that in the event the loan value exceeds the value of the home, the lender cannot collect more than the value of the home. FHA insurance will take care of the remaining amount.

Home Equity Conversion Mortgages, or HECMs, are the most common type of Reverse Mortgage. HECMs are insured by the Federal Housing Agency (FHA) and can provide additional financial security while allowing senior homeowners to stay in their home.

• 1.

  Talk to a Reverse Mortgage professional to your loan officer to determine if refinancing will offer you financial benefits in the long-term.

• 2.

  Your Reverse Mortgage professional will confirm if you meet the loan requirements depending on the type of Reverse Mortgage you’re applying for and assist you through the loan application process, which includes obtaining an appraisal for your home and submitting necessary financial documentation.

• 3.

  Once your loan is approved, you’ll close by reviewing your final loan documents, and selecting how you will receive your funds moving forward.