What is a Reverse Mortgage?

A reverse mortgage is a loan against the equity in your home that provides tax-free cash advances, but requires no payments during the term of the loan. Since there are no monthly payments during the life of the loan, the balance grows larger and the equity in the home gets smaller.

The loan is not due and payable until the borrower no longer occupies the home as a principal residence, whether it is from the last surviving borrower selling, moving out permanently or passing away.

Can Everyone Qualify For a Reverse Mortgage?

No. You must be at least 62 and own your own home or condominium in order to qualify for a reverse mortgage. There are no income or credit requirements to qualify. Based on the amount of benefit, which you qualify for, you may be eligible for a reverse mortgage even if you still owe money on your first mortgage.

The proceeds are available in a lump sum, fixed monthly payments a line of credit; or a combination of these options and can be used for daily living expenses, home improvements, travel, pay-off of existing debts, long-term health care, retirement and estate tax planning, and any other needs you may have.

The amount of benefit that you will qualify for will depend on your age at the time you apply for the loan, the type of reverse mortgage you choose, the value of your home, current interest rates, and where you live. As a general rule; the older you are and the greater your equity - the larger the reverse mortgage benefit will be.

Another benefit of these loans is that they are "non recourse" this means that no matter how high the loan balance grows, the borrower or their heirs never owe more than the home's market value.