Reverse Mortgage Frequently Asked Questions
Here are some frequently asked questions about reverse mortgages, how to qualify, the advantages and the process!
Question: How old do I have to be to qualify?
Answer: In most cases 62 - this is the age the FHA requires the youngest person listed on the title.
Question: Do I have to live in the house to get a reverse mortgage?
Answer: Yes! You must live in it an it must be your primary residence
Question: Can I get a fixed rate?
Answer: Yes - you will need to choose either a fixed rate or adjustable
Question: What type of housing is eligible?
Answer: Single family home or 2-4 unit home with one unit occupied by the borrower, HUD-approved condominium project, manufactured home that meets FHA requirements (sorry no sailboats!)
Question: What is the most I can borrow?
Answer: The FHA limit is $970,800
Question: Do I have to own my house outright?
Answer: No, but you have to have a sizable amount paid off - it will vary based on which loan option you choose.
Question: Can I get a line of credit
Answer: Yes this is available with an adjustable rate reverse mortgage
Question: Are there any risks associated with getting a reverse mortgage loan?
Answer: Once you obtain a reverse mortgage loan and use all the funds, you may not be able to obtain another reverse mortgage loan depending on circumstances, such as the amount of equity left in your property. Obtaining a reverse mortgage loan early into retirement may impact your ability to access funds later in retirement.
Question: Is there any risk of losing my home with a reverse mortgage?
Answer: With a reverse mortgage, you still own your home – just like you do with any other type of mortgage. As long as you continue to fulfill the obligations of the loan, which include occupying your home as your primary residence, paying your property taxes, homeowners insurance, any HOA dues and keeping up with basic maintenance and repairs. If you fulfill these obligations, your loan remains in good standing. However, if you don’t uphold these responsibilities, the loan may become due, and the house may be sold to pay off the loan.
Question: If I get a reverse mortgage loan now, will I be able to access this again in the future?
Answer: The timing of when you get a reverse mortgage loan and how you use it is an individual decision which should be made by looking at overall circumstances and situation. If you take a reverse mortgage now and use all your available funds you would only be able to access additional funds if your property value increased substantially and you were eligible to refinance into larger reverse mortgage. However, if you took a reverse mortgage now and did not use all of the funds your available funds would increase over time, so it is best to weigh your options based upon your individual situation.
*These have not been reviewed or approved by HUD.