The Top 5 Reverse Mortgage Frequently Asked Questions
Our Top Reverse Mortgage FAQs are listed here. Learn about some of the most frequent asked questions about reverse mortgages and the answers. This is a great place to get started learning the facts about this important mortgage option.
Q. What is a reverse mortgage?
A. It’s a loan available to homeowners age 62 or older that allows you to tap into the equity you’ve built up in your home. When you take out a reverse mortgage, instead of making monthly payments as with a traditional mortgage, you receive cash for the things you may need. The loan is not due until the last borrower leaves the home permanently.
Q. If I take out a reverse mortgage, will the bank own my home?
A. You continue to own and live in your home – the bank is merely extending a loan to you. Because you continue to remain the homeowner, you remain responsible for payment of property taxes, hazard insurance, HOA fees if applicable and keeping the home in reasonable condition.
Q. What is the difference between a reverse mortgage and a home equity loan?
A. With a Home Equity loan or line-of-credit, you have to make monthly payments – with a reverse mortgage; you do not need to pay back the loan until the last surviving borrower leaves the home permanently.
Q. How much money can I get?
A. The amount of money you can borrow depends on several factors, including your age, current interest rates, the appraised value of your home, the Federal Housing Administration’s (FHA’s) lending limit, and your past payment history of property charges, installment and revolving credit accounts.
Q. What about the interest rates and fees?
A. Interest rates can be either fixed or adjustable depending on what you choose, and how you want to receive the loan proceeds. Interest is accrued based upon the amount of money you withdraw.
Additional costs typically include origination fee, closing costs and FHA Mortgage Insurance premiums. These costs can be included in to the reverse mortgage and paid (with interest) when the loan becomes due.
Have more questions? We can answer them. Contact us for more information…
