In fact, you don't need to repay the loan as long as you or another borrower continues to live in the house and keep the taxes paid and insurance in force. And the loan is not due at that time either. Can a reverse mortgage lender take my home away if I outlive the loan?Ī. In other words, the house stands for the debt. What's more, since the reverse mortgage is what is known as a 'non-recourse' loan, the lender cannot seek repayment from your income, your other assets, or your estate. You can never owe more than what your home is worth. Is it possible for my loan balance to become greater than the value of my home?Ī. Refinancing can make sense if your home increases in value or interest rates drop. Can I refinance a reverse mortgage, as I would be able to do with a traditional home mortgage?Ī. The reverse mortgage lender is merely extending a loan to the borrower. The borrower retains title to the property.
I've heard that with a reverse mortgage the lender would own my home. The money you get from a reverse mortgage is yours to use in any way you choose.īecause the homeowners retain title, they remain responsible for the payment of property taxes, insurance, utilities, home maintenance, and other expenses - just as they would with a standard first mortgage or home equity loan. Because the money you receive from a reverse mortgage is not considered income, it is tax free* and will not affect your Social Security or Medicare benefits. You need not pay back the reverse mortgage loan nor make any monthly mortgage payments until you permanently move out of the home. It allows you to remain in your home and retain home ownership. A reverse mortgage allows you to remain in your home and retain home ownership. What are the advantages of a reverse mortgage?Ī. What are the advantages of a reverse mortgage? Since reverse mortgage borrowers need not make monthly repayments, there are no income qualifications.ģ. Can my current income influence my ability to get a reverse mortgage?Ī. However, with a reverse mortgage you do not make any monthly mortgage payments for as long as you stay in the home.
They differ in that with a home equity loan you must make regular monthly payments of principal and interest. Both a reverse mortgage and a home equity loan use the equity you have built up in your home to provide you with readily available cash. How is a reverse mortgage like a home equity loan? How is it different?Ī. How does a reverse mortgage differ from a home equity loan? The loan only becomes due when the last borrower (s) permanently leaves the home.Ģ. A reverse mortgage is a loan that enables senior homeowners, age 62 and older, to convert part of their home equity into tax-free* income-without having to sell their home, give up title to it, or make monthly mortgage payments.
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