Below is a listing of basic frequently asked questions and answers about reverse mortgages. In addition to these basic reverse mortgage FAQ’s, we have questions and answers focusing on more specific reverse mortgage topics:

Reverse Mortgages and Taxes

Reverse Mortgage Counseling

Reverse Mortgage Rates and Fees

Questions From Visitors

If you have a question about reverse mortgages not included here, you can use the form at the bottom to submit it! We’ll do our best to get you a prompt and accurate reply.

Basic Reverse Mortgage Questions and Answers

1. What is a reverse mortgage?
2. Why the name “reverse mortgage”?
3. Why would anyone want to go deeper in debt in retirement?
4. Can any homeowner get a reverse mortgage?
5. Will my credit score or income level be a factor?
6. If I pass away, will my children be left with debts?
7. Doesn’t the lender get title to my home with a reverse mortgage?
8. Isn’t a reverse mortgage a “last resort” loan intended primarily for low-income homeowners?
9. I’ve heard reverse mortgages called “non-recourse” loans. What does this mean?
10. What are the main advantages of a reverse mortgage?
11. What are the disadvantages of a reverse mortgage?
12. Can I qualify for a HUD reverse mortgage?
13. Can I apply if I didn’t buy my present house with FHA mortgage insurance?
14. What types of homes are eligible?
15. What’s the difference between a reverse mortgage and a bank home equity loan?
16. Can the lender take my home away if I outlive the loan?
17. Will I still have an estate that I can leave to my heirs?
18. How much money can I get from my home?
19. Should I use an estate planning service to find a reverse mortgage? I’ve been contacted by a firm that will give me the name of a lender for a “small percentage” of the loan.
20. How do I receive my payments?
21. How long does it take to get a reverse mortgage?
22. Once loan papers are signed, how long do I have to change my mind if I get “cold feet” and decide that a reverse mortgage isn’t right for me?
23. If I cancel my loan during the three-day “right of recession” period, will I lose the fees and charges I paid?
24. What documents will I be required to show in order to process a reverse mortgage?
25. How do I find a reverse mortgage lender?
26. What are the top reasons most people take out a reverse mortgage?
27. what happens if i don’t pay my property taxes and insurance.and what if i don’t currently have homeowners cause it was in my payment on my mortage and my house was auction
28. My husband has inherited his mother’s home
    and 10 acre property in a different state.
    He has been looking in to getting a reverse mortgage, but, only lives there a few months out of the year. He pays all the taxes and insurance on the house. My question of concern is “Does he have to live there permanently and have a dr. license for that state?
    Also, he says he can get a lump sum which he needs to pay off other bus. bills. Is that true he would get that?
    Thank you
29. Can you purchase a home with the money?
    Do you have to remain in the property?
30. Both my father (72y.o.)and me are on title but only me on the mortgage. Would a reverse mortgage be possibe just for my dad in this situation. My mother is 60y.o., can she be added to title since she’s not yet 62 to meet the age requirement.
31. MY FATHER IS 72 AND MY MOTHER IS ALSO 72. SHE IS CURRENTLY IN A LONG TERM CARE FACILITY. SHE IS ON MEDICARE AND FULL MEDICAID AS THEIR MONTLY INCOME IS ONLY SOCIAL SECURITY. MY FATHER IS NOT ON MEDICAID BUT WILL PROBABLY NEED IT IN A FEW MONTHS. HE IS WANTING TO GET A REVERSE MORTAGE ON THEIR HOME THAT IS CURRENTLY PAID FOR. IF THEY GET A REVERSE MORTAGE WILL IT AFFECT MY MOTHERS MEDICAID? THEY COVER ALL HER MEDICAL BILLS. AND IF IT DOESN’T AFFECT HER MEDICAID , WILL IT AFFECT MY FATHER WHEN HE APPLIES FOR IT? BOTH LIVE IN FLORIDA.
32. My mother in law is recently diagnosed with terminal cancer; her reverse mortgage was obtained in May 2007. I realize the Note is due upon her death, however do we have some time to sell the property?
33. What happens if there is a disabled child (53 yrs of age)living in the home, and the owner goes back and forth from the home to a Nursing Home (living in the home part-time)? Does the disabled child have rights to the home?
34. If we have taken loan for about $10,000 can we make repayment part by part. for ex ample I would like to make part payment $10,000 each year. If so my interest will be calculated on balance principle
35. i’m 62 years old my mortgage bal is 150,000
36. i’m 62 my mortgage bal is 150,000 my home value is 390,000 can i qualify for a reverse mortgage
37. We took out a reverse mortgage 2 years ago and the money is in a credit account. I am a legal alien and am strongly considering returning to the UK. What happens to the house and money if my husband and I do leave the USA permanently?
38. I am 66 years old and my wife is 59 but is disabled and has is on medicare.Our mortage balance is $175000. Our home is worth $275,000. Can we qualify for a reverse mortage? Or do we need to place the mortage in my name(age 66) and then apply?
39. How soon should the heirs notify the mortgage company owner is deceased if someone is still living there not on the ded?
40. I am 62 years old. Own a home in Dade County. My home value at this time is $240,000 and my present mortgage debt is $105,000. If I do a reverse mortgage, will I get any money back? There is no second mortgage or any liens in the house. What is the difference between the appraised value and the HUD value? Thank you.
41. The market value is lower that debt and can not get no more than going rate to finance reverse mortage. Do hiers repurchase at market value?
42. My father expired 03/07 and children were awarded the home 08/08. Can heirs re-purchase at market rate/Compromise Sale or Short Sale. What is best based on FHA/HUD Reverse Mortgage
43. How do I stop a mortgage reversal and what are the consequences of stopping it? My mother didn’t need the mortgage reversal and my sister signed as her Power of Attorney (mom has Alzheimer’s) to mortgage reversal. Now in court proceeding shortly to receive the guardianship over my mother. I want to stop mortgage reversal but don’t know the consequences of doing so.
44. What would be the situation assuming that I obtained a reverse mortgage, but that at some future time I was unable to pay my bills.If I file for bankruptcy can my creditors attempt to force a sale of the house?
45. 9/22/08
    I currently have a reverse mortgage line of credit.
    Due to present upheavel in financial markets is it possible that my line of credit (FHA insured) could be suspended or changed ? Or, do I have a firm contract and can depend on my line of credit being available?
46. My grandmother just passed, should I contact the lender and what happens when I contact them will the clock start? I don’t have good credit so what should I do, the used amount is only 135K
47. My Parents have a proprietary reverse mortgage and I was wondering if the lender has the option to suspend their line due to the declining property values and due to the fact that it is not an insured loan. Their property is located in California and they have about $50,000 left to draw. DO they have to give them some form of notification that the line is being suspended.
48. My father currently has a reverse mortage (FHA). Can the lender require him to pay the loan back if they collapse during these difficult times?
49. Is a lender allowed to freeze the available funds on a non-governmental, non-insured reverse mortgage? When I closed my reverse mortgage I did not take all of the funds and therefore request money each month to pay my bills. However, my lender is telling me that I cannot take the funds due to the decline in my property value. Do they have the right to suspend these funds?
50. My husband mother passed back in january,2008 she took out a reverse mortgage. Now their is a balance of $32,000.00 the loan is due, my husband has a brain tumor he is not working, I work but not sure if If I want to take over the responsibility of older home. Is their anyway we can get the company to maybe sell it to us for less like a short sale because we really don’t want the house to be forclosed on but we wanted to get our own home, can we get that balance maybe tacked on to another loan once we find our home then charge rent for this one. have lots of questions, but his sisters want us to purchase knowning his situation.I would try and purchase for investment purposes but want to know what I might be getting into.
51. I took out a non-recourse reverse mortgage in 2007 and due to the deterioration of the neighborhood would like to move out. However the value of my house has plummeted to well below the mortgage balance. If I did move would my credit still be ruined and would there still be a foreclosure?
52. A very close friend to my family is 91 years old.
    His interest in reverse mortgage has lead me to to inquire for him this question. His spouse who is deceased is on the title and he has four living children (heirs). They have told him they wanted their share of their mother’s part and will not sign necessary documents for this to go through unless they are guaranteed a certain amount of monies. I suggested an attorney since heirs are involved. Please help. Thank you.
53. How long does a person have to be in title in order to obtain a reverse mortgage ?
54. My home is worth $1,000,000 and we owe $230,000. We live on Long Island. How much can we take as a reverse mortgage?
55. Can you have a second mortgage on a reverse mortgage
56. Can payments be made towards the reverse mortgage loan after 5 or more years? My husband and I are both under 65 and retired. Is the repayment of the loan only upon sale of the home?
57. If you have a reverse mortgage and you now owe more than your house is worth due to market conditions. The person has left home and is in a nursing home. Does the house satisfy the entire payment of the mortgage. The entire amount allowed has been borrowed and no way to pay back.
58. My mother, 78, holds title to a house that she partially lives in. She already has a reverse mortage on her principal residence. Her companion has paid and is paying for all of the monthly bills, including upkeep, on the property in question for a reverse mortgage. She would like to quitclaim the property to her companion so that he can get qualify for a reverse mortgage. The house is in Osceola County, Florida. It is worth approx. $180G and there is a balance of approx. $90G. How long does the companion have to wait after obtaining title to the house before he can quality for a reverse mortage. How much cash can he expect to get after the reverse mortgage. He is 79 years of age. NOTE: The property was in both names for the first 7 years of its origination. It was quitclaimed to my mother her by her companion in 2007. Now, she wants it quitclaim to him for the reverse mortgage.
59. can one re-finance a reverse mortgage,after a few years on the program?
60. 1. How many years of payments are typical?
    2. Do payments change if market value changes over the period of the loan?
    3. Since the homeowner retains ownership of the home, I assume they are still responsible for all maintenance needs as usual?

1. What is a reverse mortgage?

   A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. The HUD HECM (home equity conversion mortgage) reverse mortgage provides these benefits, and it is federally-insured as well.

2. Why the name “reverse mortgage”?

   These mortgages work just the reverse of regular or “forward” mortgages. Under a traditional (or forward) mortgage, an individual borrows money to buy a house and makes periodic loan payments to a lender. Under a reverse mortgage, a homeowner borrows against the equity in her house and receives money from a lender. The financial results also are the reverse of a regular mortgage: with a regular mortgage your debt decreases and your home equity rises as loan payments are made; with a reverse mortgage, your debt increases and equity declines over the life of the loan.

3. Why would anyone want to go deeper in debt in retirement?

   Your home equity can be thought of as a form of savings - just like an IRA or 401k plan - that can be used to help finance your retirement. In fact for most Americans, home equity is their single largest form of savings. So, while a reverse mortgage is a form of debt, it is also a tool to access home equity savings that can be responsibly spent down to improve your quality of life in retirement. Two main benefits of a reverse mortgage are:

   • No matter how much you borrow from the progam over the course of your retirement, you will never owe more than the market value of your home.
   • You can tap the equity savings in your home without selling. Most senior homeowners indicate that they prefer to remain in their homes during retirement.

4. Can any homeowner get a reverse mortgage?

   No. Here are the basic qualifications that must be met to be eligible for a reverse mortgage:

   • You must be a homeowner and live in the home as your primary residence;
   • You must ownt the home outright or have a relatively small outstanding mortgage balance that can be paid off with the reverse mortgage proceeds;
   • All homeowners on the title must be at least 62 years old;
   • The home must be in generally good repair, meet FHA property standards or be able to be brought up to standards using the reverse mortgage loan proceeds.

5. Will my credit score or income level be a factor?

   No. Unlike regular mortgages, there are no income or credit score requirements to qualify for a reverse mortgage. This is because the expectation is that loan repayment will come from the ultimate sale of the home. There are a few basic credit standards that must be met, however:

   • The homeowner(s) cannot currently be in bankruptcy;
   • There can be no liens against the home;,/li>
   • The homeowner(s) cannot be delinquent on any debt owed to the federal government.

6. If I pass away, will my children be left with debts?

   The amount owed by the estate on a reverse mortgage can never exceed the market value of the home. A reverse mortgage can actually protect your estate because the accrued loan will never exceed the value of the home. For example, if you pass away and leave to the children: A home worth: $200,000
   An investment portfolio worth: $100,000
   An unpaid reverse mortgage Loan worth: -$300,000

   Your estate would get the full investment portfolio of $100,000, even though full repayment of your reverse mortgage is not covered by the value of your home.

7. Doesn’t the lender get title to my home with a reverse mortgage?

   No. The lender places a lien on the home just the same as with a traditional mortgage or home equity loan. The lien ensures the loan is repaid when the property is sold. Title to the home remains with homeowner.

8. Isn’t a reverse mortgage a “last resort” loan intended primarily for low-income homeowners?

   Some experts do place reverse mortgages in the category of “last resort” loans primarily because the associated costs and fees tend to be very high. These experts advise seniors to first consider other options such as selling the home, home equity line of credit, or tapping other savings. On the other hand, the newer generation of retirees is more accepting of using home equity for living expenses. More and more reverse mortgages are being taken out by homeowners wanting to travel, help pay for grandkids’ college, or just improve their living standard. Bottom line: No, reverse mortgages aren’t just for low-income homeowners or homeowners facing a financial emergency.

9. I’ve heard reverse mortgages called “non-recourse” loans. What does this mean?

   This means that the only thing pledged for repayment of the loan is the value of the home when sold. The lender has no recourse against your other assets or other assets of your estate even if the amount owed exceeds the value of the home.

10. What are the main advantages of a reverse mortgage?

    • Homeowners can pull needed cash from the equity of the home, without incurring monthly expenses.
    • Lenders cannot force homeowners to sell the property to pay back the loan.
    • Reverse mortgages guarantee that the homeowner can stay on the property for as long as he or she lives, even if the outstanding loan and interest grow to exceed the value property’s value.

11. What are the disadvantages of a reverse mortgage?

    • Reverse mortgage fees can be high, although the fees are often rolled into the loan and not paid upfront. A reverse mortgage can cost thousands more than a conventional mortgage.
    • Reverse mortgages are complex and counter-intuitive to most people used to paying down a traditional mortgage most of their adult lives. It is particularly important for homeowners to do their homework, get sound advice and be certain they understand what they are doing.
    • Reverse mortgages will reduce the size of (or possibly eliminate) the estate left to heirs.

    # Reverse mortgages will reduce the size of (or possibly eliminate) the estate left to heirs.

12. Can I qualify for a HUD reverse mortgage?

    To be eligible for a HUD reverse mortgage, HUD’s Federal Housing Administration (FHA) requires that the borrower is a homeowner, 62 years of age or older; own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and must live in the home. You are further required to receive consumer information from HUD-approved counseling sources prior to obtaining the loan. You can contact the Housing Counseling Clearinghouse on 1-800-569-4287 to obtain the name and telephone number of a HUD-approved counseling agency and a list of FHA approved lenders within your area.

13. Can I apply if I didn’t buy my present house with FHA mortgage insurance?

    Yes. It doesn’t matter if you didn’t buy it with an FHA-insured mortgage. Your new HUD reverse mortgage will be a new FHA-insured mortgage loan.

14. What types of homes are eligible?

    Your home must be a single family dwelling or a two-to-four unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-approved. It is possible for individual condominiums units to qualify under the Spot Loan program.

15. What’s the difference between a reverse mortgage and a bank home equity loan?

    With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments. The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. You don’t make payments, because the loan is not due as long as the house is your principal residence. Like all homeowners, you still are required to pay your real estate taxes and other conventional payments like utilities, but with an FHA-insured HUD Reverse Mortgage, you cannot be foreclosed or forced to vacate your house because you “missed your mortgage payment.”

16. Can the lender take my home away if I outlive the loan?

    No! You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than your home’s value.

17. Will I still have an estate that I can leave to my heirs?

    When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs. None of your other assets will be affected by HUD’s reverse mortgage loan. This debt will never be passed along to the estate or heirs.

18. How much money can I get from my home?

    The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.

19. Should I use an estate planning service to find a reverse mortgage? I’ve been contacted by a firm that will give me the name of a lender for a “small percentage” of the loan.

    HUD does NOT recommend using an estate planning service, or any service that charges a fee just for referring a borrower to a lender! HUD provides this information without cost, and HUD-approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and free referral to a list of HUD-approved lenders. Call 1-800-569-4287, toll-free, for the name and location of a HUD-approved housing counseling agency near you.

20. How do I receive my payments?

    You have five options:

    • Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
    • Term - equal monthly payments for a fixed period of months selected.
    • Line of Credit - unscheduled payments or in installments, at times and in amounts of borrower’s choosing until the line of credit is exhausted.
    • Modified Tenure - combination of line of credit with monthly payments for as long as the borrower remains in the home.
    • Modified Term - combination of line of credit with monthly payments for a fixed period of months selected by the borrower.

21. How long does it take to get a reverse mortgage?

    The reverse mortgage loan process consists of four steps: meeting with a counselor, meeting with the lender, getting the home appraised, and closing. The entire process will generally take at least thirty days and, more often, sixty to ninety days.

22. Once loan papers are signed, how long do I have to change my mind if I get “cold feet” and decide that a reverse mortgage isn’t right for me?

    Like other types of loans, reverse mortgages are governed by the Truth in Lending Act (TILA) which provides consumers with a three-day right of rescission during which you can change your mind and cancel the loan. This act gives you extra time to carefully consider your new loan. Sometimes called a cooling off period, it allows you 3 extra (business) days from the date loan papers are signed to be certain the reverse mortgage is exactly what you expected.

23. If I cancel my loan during the three-day “right of recession” period, will I lose the fees and charges I paid?

    You will be refunded most fees incurred. When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void and the consumer will no longer be liable for any amount, including any finance charge. Within 20 calendar days after receipt of a notice of rescission, the lender is required to return any money or property that was given to anyone in connection with the transaction and must take any action necessary to reflect the termination of the security interest.

24. What documents will I be required to show in order to process a reverse mortgage?

    You should have available and be prepared to produce the following documents during the reverse mortgage loan process:

    • driver’s license or other other official picture ID;
    • Social Security and/or Medicare card;
    • current mortgage statement (or relevant contact info) if you have an outstanding mortgage on the home;
    • declarations page from your current homeowners insurance policy;
    • the original signed certificate from your reverse mortgage counseling session.
    • certificate of death if there is a deceased spouse on the title to the home’
    • copy of the original property deed;
    • copy of the power of attorney, living will, or trust document if these situations are applicable to you.

25. How do I find a reverse mortgage lender?

    The market for reverse mortgages is growing rapidly, but they are still a niche financial products not available from most banks or credit unions. Assuming your first step in the loan process is to receive required counseling, you can ask your counselor for a list of qualified lenders in your area. Counselors cannot recommend or “steer” you towards a particular lender. You can also find reverse mortgage lenders at various websites such as NRMLA.

26. What are the top reasons most people take out a reverse mortgage?

    According to a study done by AARP, the main reasons people give for considering a reverse mortgage are as follows:

    Pay off mortgage (20%)
    Home repairs/improvements (18%)
    Improve quality of life (14%)
    Everyday expenses (10%)
    Emergencies/unexpected (9%)
    Pay off non-mortgage debts (7%)
    Health or disability (5%)
    Property taxes/insurance (5%)
    Financial help to family (2%)
    Investments, annuities, or long-term care insurance (1%)
    Household chores (1%)

    The three top reasons - pay off mortgage, home repairs, improve quality of life - accounted for more than one-half of the primary uses of reverse mortgages.

27. what happens if i don’t pay my property taxes and insurance.and what if i don’t currently have homeowners cause it was in my payment on my mortage and my house was auction

    General upkeep along with paying your taxes and insurance are required to keep a reverse mortgage in place, otherwise, the lender or HUD could require repayment for the reverse mortgage proceeds and accrued interest. For some that own their homes outright, some don’t keep even a simple policy in place but will be required to once the reverse mortgage is put into place (FHA rules). While I don’t suggest the reverse mortgage lender put taxes and insurance in an escrow account for you (BTW- they hold twice the amount and it diminishes your potential access to equity) it is an option for some.

28. My husband has inherited his mother’s home
    and 10 acre property in a different state.
    He has been looking in to getting a reverse mortgage, but, only lives there a few months out of the year. He pays all the taxes and insurance on the house. My question of concern is “Does he have to live there permanently and have a dr. license for that state?
    Also, he says he can get a lump sum which he needs to pay off other bus. bills. Is that true he would get that?
    Thank you

    To get a reverse mortgage, the owner of the home (and those on title) would have to be 62 or older and have to be domiciled at this property which probably means that since he’s your husband you would both have to move there to consider it an owner occupied property. Otherwise its a second home and even though some lenders “say” they have will lend on second homes on a case by case scenario, I’ve never know someone to do it. Second home usually is a home in a resort environment like along the coasts or lakes or in the mountains. If you and he are 62 or older you could consider a reverse mortgage on your current property if you have enough equity.

29. Can you purchase a home with the money?
    Do you have to remain in the property?

    If you are asking if you can purchase a home with the proceeds from a reverse mortgage the answer is yes. Most current reverse mortgage programs require that you can only take out a reverse mortgage on the owner occupied property. The property must be main domicile although you can be away for extended periods of time for vacation homes or trips abroad, its important that the owner is not away from the home for 12 consecutive months.

30. Both my father (72y.o.)and me are on title but only me on the mortgage. Would a reverse mortgage be possibe just for my dad in this situation. My mother is 60y.o., can she be added to title since she’s not yet 62 to meet the age requirement.

    No, both or any parties have to be 62 or older. For you to secure a reverse mortgage for your father, you would have to come off title. I do not automatically suggest telling someone to come off title and in almost all cases they should discuss with an elder law attorney to determine your right to the property should your father pass away before your mother turns 62. Since you mention there is a mortgage, the reverse is probably being looked at to get rid of the monthly mortgage payment. Instead of writing a check each month for the reverse mortgage you can use that money for savings, paying off other bills or if its significant, some have considered life insurance for the someone like your father to help secure the property with the life insurance proceeds should he pass before someone else turns 62. Again, consult an elder law attorney before doing this.

31. MY FATHER IS 72 AND MY MOTHER IS ALSO 72. SHE IS CURRENTLY IN A LONG TERM CARE FACILITY. SHE IS ON MEDICARE AND FULL MEDICAID AS THEIR MONTLY INCOME IS ONLY SOCIAL SECURITY. MY FATHER IS NOT ON MEDICAID BUT WILL PROBABLY NEED IT IN A FEW MONTHS. HE IS WANTING TO GET A REVERSE MORTAGE ON THEIR HOME THAT IS CURRENTLY PAID FOR. IF THEY GET A REVERSE MORTAGE WILL IT AFFECT MY MOTHERS MEDICAID? THEY COVER ALL HER MEDICAL BILLS. AND IF IT DOESN’T AFFECT HER MEDICAID , WILL IT AFFECT MY FATHER WHEN HE APPLIES FOR IT? BOTH LIVE IN FLORIDA.

    Your folks were able to apply for and receive Medicaid with the home as an asset correct? Well then they’ll be able to secure a reverse mortgage as well BUT they need to make sure that they receive the proceeds in a fashion that doesn’t leave money in the checking or savings account that exceeds the amount that Medicaid looks for each month. They can do that by putting the “future” money they may need into the credit line method of the reverse mortgage. By doing so, they have access to their equity at any time they need it but it would only reside in a checking or savings account for a short time. Say they need $3200 to pay for a new furnace; they make the request from the credit line for the $3200, it is deposited into their checking or savings and they write a check to the furnace company for it. At the end of the month, that money is not in the checking or savings account anymore and Medicaid can’t say that they have exceeded the minimum monthly income allowance. You should also consult an elder law attorney in your area and talk with them about an Enhanced Life Estate Deed or Trust but this is a reverse mortgage should not affect your Medicaid benefits. You can find an elder law attorney for your area at www.naela.org.

32. My mother in law is recently diagnosed with terminal cancer; her reverse mortgage was obtained in May 2007. I realize the Note is due upon her death, however do we have some time to sell the property?

    Yes, I wish that your lender would have told you that. You have 6 months to pay back or refinance that property or to sell it after her passing or if she were to move to hospice for example. If there are circumstances that prevent that from happening in 6 months you can apply for (2) 90 day extensions, technically giving you 1 year. Also know that interest will continue to accrue on any unpaid balance. My condolences to your mother and you.

33. What happens if there is a disabled child (53 yrs of age)living in the home, and the owner goes back and forth from the home to a Nursing Home (living in the home part-time)? Does the disabled child have rights to the home?

    The reverse mortgage client must not be away from their home for more than 365 consecutive days or the loan will be called due, regardless of a less than 62 year old disabled person living in the home. If the owner goes back and forth to a nursing home, that’s alright if they can manage some days in their own home. Best wishes to all.

34. If we have taken loan for about $10,000 can we make repayment part by part. for ex ample I would like to make part payment $10,000 each year. If so my interest will be calculated on balance principle

    Your interest is based on unpaid balance, so if you made payments (which is perfectly acceptable) you would be decreasing your unpaid balance. Any money put into the credit line would also continue to grow, so as you aged each year, your future available cash amount would continue to increase. Its not a bad plan if you can manage it.

35. i’m 62 years old my mortgage bal is 150,000

    Depending on which county you live in and the lending limit, you may be able to pay off your existing mortgage with a reverse mortgage. If your county lending limit is somewhere over $300,000 you may qualify. Otherwise you may be short to close and have to come to the table with money. This happens often and some folks take into consideration that they no longer have a mortgage payment each month and that at some point in the near future they will have realized a break even point from the money they brought to the table and money they are now saving each month from no longer having a mortgage payment.

    Please let us know what zip code you reside so we can run some preliminary numbers for you.

36. i’m 62 my mortgage bal is 150,000 my home value is 390,000 can i qualify for a reverse mortgage

    Yes you can, depending upon the county lending limit you reside and not only that you can get extra money in a lump sum or put into your credit line that increases over time. Most folks that pay off an existing mortgage hold off on any extra money from the reverse mortgage so they can see what affect “not having to make a mortgage payment each month” makes in their monthly budget. If your mortgage payment each month is $1200 and you don’t have to make that payment anymore, imagine how fast your checking account starts to add up with the extra $1200 each month staying put instead of going to a bank somewhere.

    Can we help you find a lender that would be interested in securing this reverse mortgage for you? Please send us an email.

37. We took out a reverse mortgage 2 years ago and the money is in a credit account. I am a legal alien and am strongly considering returning to the UK. What happens to the house and money if my husband and I do leave the USA permanently?

    Thats a great question but if you leave for more than 12 consecutive months, you will forfeit the loan and they will ask that you pay back what you’ve used. If you don’t they begin foreclosure proceedings and eventually take your home just like a regular mortgage and that goes on your credit report. If you plan on leaving, just sell the home, you should have plenty of equity left in just 2 years.

38. I am 66 years old and my wife is 59 but is disabled and has is on medicare.Our mortage balance is $175000. Our home is worth $275,000. Can we qualify for a reverse mortage? Or do we need to place the mortage in my name(age 66) and then apply?

    This does not work as a reverse mortgage, there is not enough equity in the home to allow for a reverse mortgage to pay off the existing $175,000 mortgage. You would have to come to the table with money to close and a rough estimate shows that amount would need to be in the $50,000 range. To answer your other question, 62 is the youngest age for someone to secure a reverse mortgage, regardless of the situation. If this loan did qualify, you would have to be the only person on title but you would want to consult and elder law attorney before proceeding with a transaction like this since you would put your wife in jeopardy if you passed away before she would qualify to be put on the loan at 62.

    I hope that answered your question.

39. How soon should the heirs notify the mortgage company owner is deceased if someone is still living there not on the ded?

    Since interest continues to accrue on the loan even after the borrower is deceased, its your decision as the longer its in place, the more is owed to the lender to pay off the reverse mortgage. FHA rules say that you have 6 months from the time of death to pay off the reverse mortgage either through refinance or selling the home and then you can file two 30 day extensions for a total of 12 months. By not telling them of the death they have the right to force a sale of the home in 30 days to pay off the reverse mortgage.

40. I am 62 years old. Own a home in Dade County. My home value at this time is $240,000 and my present mortgage debt is $105,000. If I do a reverse mortgage, will I get any money back? There is no second mortgage or any liens in the house. What is the difference between the appraised value and the HUD value? Thank you.

    When the appraisal is done, its an FHA based appraisal so the values are the same. You may be referring to FHA lending limits that would make those numbers different ONLY if your home was worth more than the Dade County limit of $362,790. As for your question of how much you could “get back”, that would be somewhere in the $20,000 range. So consider that whatever you are currently plunking down on your monthly mortgage payment will now stay in your pocket each month. If that payment was $750 a month or $9000 a year, we suggest you see how that works for a couple of months before you take out additional money from your credit line unless of course you needed something for a big ticket item like new roof or car or other larger debts.

41. The market value is lower that debt and can not get no more than going rate to finance reverse mortage. Do hiers repurchase at market value?

    If you are saying that your home, on which you currently have a reverse mortgage, is worth less than the unpaid balance (which includes any money you’ve used plus accrued interest), then yes, whoever wants to buy the home would buy it at current market value if they wanted to keep it in the family. You, nor they, would owe a penny more than what the market would bring for the property. The MIP or mortgage insurance premium that was paid to HUD insures this. I hope we were able to answer your question.

42. My father expired 03/07 and children were awarded the home 08/08. Can heirs re-purchase at market rate/Compromise Sale or Short Sale. What is best based on FHA/HUD Reverse Mortgage

    Heirs can purchase at market rate from HUD or can pay back through refinance, any money your father had used plus accrued interest during the time he had the reverse mortgage. A compromise or short sale would be done with a lender not typical of reverse mortgages.

43. How do I stop a mortgage reversal and what are the consequences of stopping it? My mother didn’t need the mortgage reversal and my sister signed as her Power of Attorney (mom has Alzheimer’s) to mortgage reversal. Now in court proceeding shortly to receive the guardianship over my mother. I want to stop mortgage reversal but don’t know the consequences of doing so.

    Did the process go to the point that the loan closed and has been recorded? There is no reversal at this point, your mother would have to pay back any proceeds from the reverse or sell the home if she wanted to discontinue use of the reverse mortgage.

44. What would be the situation assuming that I obtained a reverse mortgage, but that at some future time I was unable to pay my bills.If I file for bankruptcy can my creditors attempt to force a sale of the house?

    Yes, if you were to file for bankruptcy, FHA could ask you to pay back your loan and if you couldn’t it would require the sale of the home. You would be able to keep any remaining equity after the home was sold to pay any bills.

45. 9/22/08
    I currently have a reverse mortgage line of credit.
    Due to present upheavel in financial markets is it possible that my line of credit (FHA insured) could be suspended or changed ? Or, do I have a firm contract and can depend on my line of credit being available?

    Based on everything we’ve seen, heard, or have been questioned by attorney’s representing reverse mortgage clients, the credit line on your reverse mortgage is protected by FHA insurance. Its not a HELOC like what you would get at your local bank. Basically, the older you get, the more equity access you have, so your credit line grows at the current monthly index plus margin and MIP. You have a firm contract.

46. My grandmother just passed, should I contact the lender and what happens when I contact them will the clock start? I don’t have good credit so what should I do, the used amount is only 135K

    My condolences to you and your family, I hope she was able to spend her last days with dignity. As for your question, the interest continues to accrue on your grandmother’s loan, so the longer you keep the loan, the more you would owe back if you wanted to keep the home. Otherwise, you should get it sold as soon as you can before the interest increases more and before the home falls further in value. The heirs of your grandmother will get all remaining money after the $135K is paid back, so if the home is worth more than the “used amount”, the estate would get the remainder minus real estate commission if you use a realtor to sell it.

47. My Parents have a proprietary reverse mortgage and I was wondering if the lender has the option to suspend their line due to the declining property values and due to the fact that it is not an insured loan. Their property is located in California and they have about $50,000 left to draw. DO they have to give them some form of notification that the line is being suspended.

    The line of credit isn’t with the lender, the line of credit is a portion of available equity in their home. You are referring to suspended HELOCs or home equity lines of credit on forward or regular mortgages. They were suspended because of home values decreasing.

    Since he has $50,000 left to draw AND its still experiencing credit growth increase, he will see that $50,000 increase if he can leave it alone for awhile. Great question!!

48. My father currently has a reverse mortage (FHA). Can the lender require him to pay the loan back if they collapse during these difficult times?

    NO, the 2% MIP he paid at the beginning of his loan and the ongoing .50% interest rate he pays each month insures that the home remains in your father’s name as well as insures that upon your father moving or his death, that no one will owe a penny more than the market value of the home. The lender may have been XYZ bank but the loan was probably sold to Fannie Mae, and is now being serviced by a servicing company. The Fed propped up Fannie, so you will continue to see support of this product. A reverse mortgage is a strong program not tied to the credit market and is not taxpayer funded, its funded by those folks that took out reverse mortgages in the past. Last year 107,000 took out a reverse, this year they are on pace to outnumber last year. That’s alot of money thats been poured into the MIP fund over the last 2 years! Great question.

49. Is a lender allowed to freeze the available funds on a non-governmental, non-insured reverse mortgage? When I closed my reverse mortgage I did not take all of the funds and therefore request money each month to pay my bills. However, my lender is telling me that I cannot take the funds due to the decline in my property value. Do they have the right to suspend these funds?

    I need more information on this. You closed your reverse and then optioned to take money each month from the credit line but they aren’t allowing you access to that money? That credit line grows 5% each month (most likely) and is supposed to be available regardless of your home’s value. The reason the interest rate is more on the non-govt loans is that it includes the risk of insuring the homeowner is protected from owing more than the homes market value AND should also include a guarantee that you will have full access to any credit line you’ve established. Again, we will need more info for this, please email us through out contact page and identify a way we can get back to you.

50. My husband mother passed back in january,2008 she took out a reverse mortgage. Now their is a balance of $32,000.00 the loan is due, my husband has a brain tumor he is not working, I work but not sure if If I want to take over the responsibility of older home. Is their anyway we can get the company to maybe sell it to us for less like a short sale because we really don’t want the house to be forclosed on but we wanted to get our own home, can we get that balance maybe tacked on to another loan once we find our home then charge rent for this one. have lots of questions, but his sisters want us to purchase knowning his situation.I would try and purchase for investment purposes but want to know what I might be getting into.

    If you can’t provide the 32,000 out of pocket or through financing, you would then have to sell the property withing 6 months from your mother in-laws passing.

51. I took out a non-recourse reverse mortgage in 2007 and due to the deterioration of the neighborhood would like to move out. However the value of my house has plummeted to well below the mortgage balance. If I did move would my credit still be ruined and would there still be a foreclosure?

    NO, you said it first, its a non-recourse reverse mortgage. Not only do you not owe any money on the property if the value is less than the reverse mortgage balance, but its not a “credit” issue anyway. We’re sorry that the neighborhood has deteriorated and if you have to move, you can do so with no costs to you, just let your servicing company or lender know your intentions and they will begin the process of putting your home on the market.

    If you do decide to stay, you will never owe a penny more than the market value (what the home would bring on the open market).

52. A very close friend to my family is 91 years old.
    His interest in reverse mortgage has lead me to to inquire for him this question. His spouse who is deceased is on the title and he has four living children (heirs). They have told him they wanted their share of their mother’s part and will not sign necessary documents for this to go through unless they are guaranteed a certain amount of monies. I suggested an attorney since heirs are involved. Please help. Thank you.

    I understand your question and also agree that an attorney should be brought in to assist. These cases can get ugly if all the information isn’t understood. In this case, you don’t mention if the 91 year old is doing this for extra cash or if they are doing it to pay his wife’s share to the children (which happens from time to time). In fact, this is a great tax free way to distribute holdings to children. If you would be willing to discuss this more, I can give you a better idea of the money available for both your friend and his family. There are some great resources available at www.naela.org, its the National Association of Elder Law Attorneys and you can search by zip code to find a qualified attorney in your area. If you happen to be in the Washington, DC area a great elder law company to contact is www.offitkurman.com.

    If the situation is different, its also advantageous to look at how your friends remaining equity can be protected in other ways by using the reverse mortgage. If the children are not on title, she can be removed if he has a copy of her death certificate. In addition, if there is a trust, it would need to be reviewed by the lender and that’s another reason to have an attorney involved. The bottom line is that if the father needs access to cash, he can do so and still be able to ensure that the kids can get their share in a diplomatic way.

53. How long does a person have to be in title in order to obtain a reverse mortgage ?

    A lot of lenders have recently changed that requirement to 6 months because of fraud prevention, however there are exceptions where a family member may have added someone to title for trust purposes and has to change it to “keep the house” with a reverse. So, 6 months.

54. My home is worth $1,000,000 and we owe $230,000. We live on Long Island. How much can we take as a reverse mortgage?

    It depends upon your age. Someone 75 years old can get access to $275,000, a 70 year old, $253,000 and a 65 year old, $234,000 using this week’s Expected Rate of 5.77%. Should that number go up, your limits will go down. It does appear as though you would be able to pay off your $230,000 mortage which would put money in your pocket because you would no longer be sending a payment each month. Instead you can start saving and enjoying things a bit more. Let us know if you have other questions.

55. Can you have a second mortgage on a reverse mortgage

    No, the reverse mortgage sits in first and second position on the deed, there is no third position.

56. Can payments be made towards the reverse mortgage loan after 5 or more years? My husband and I are both under 65 and retired. Is the repayment of the loan only upon sale of the home?

    You can make payments towards the reverse mortgage any time you wish, there is no limit to how much or when you can make payments back into the loan. You can pay it in full or pay it in parts, but most folks never do this. The real purpose of the reverse mortgage is for cash flow reasons so paying it back would decrease your cash flow. However, its entirely up to you.

    The repayment of the loan is required for various reasons: upon the sale of the property as you mention, upon the passing of the last remaining owner, if you can’t maintain the property in its physical condition, if you can’t pay taxes and insurance, if you refinance or take a different type of loan on the property, if its no longer your owner occupied property (can’t be a rental). If you are not concerned with the legacy of the home, you can truly forget about paying back this loan as the HUD mortgage insurance premium (MIP) provides that assurance that the loan will be made whole at the end of your life in the home.

    Any other questions, please let us know.

57. If you have a reverse mortgage and you now owe more than your house is worth due to market conditions. The person has left home and is in a nursing home. Does the house satisfy the entire payment of the mortgage. The entire amount allowed has been borrowed and no way to pay back.

    If the homeowner is in a nursing home and not expected to return for 12 months, the home will have to be sold to satisfy the loan. The sale of the home will satisfy the loan as you summized and the mortgage insurance premium will pay any shortfall owed so the borrower and or their children will not be on the hook to satisfy any amount over the sale amount. I hope that answered your question, please let us know if you need more information.

58. My mother, 78, holds title to a house that she partially lives in. She already has a reverse mortage on her principal residence. Her companion has paid and is paying for all of the monthly bills, including upkeep, on the property in question for a reverse mortgage. She would like to quitclaim the property to her companion so that he can get qualify for a reverse mortgage. The house is in Osceola County, Florida. It is worth approx. $180G and there is a balance of approx. $90G. How long does the companion have to wait after obtaining title to the house before he can quality for a reverse mortage. How much cash can he expect to get after the reverse mortgage. He is 79 years of age. NOTE: The property was in both names for the first 7 years of its origination. It was quitclaimed to my mother her by her companion in 2007. Now, she wants it quitclaim to him for the reverse mortgage.

    The easy answer to your question is 6 months for the companion to wait until he can get the reverse mortgage. If he can provide proof that he has been living in the home for an extended period of time, say 12 months, then he could possibly begin the process now. Title records will show he was title, then off. As for how much he can or could get, its closer to $32,000 after the $90K is paid off. Can we help you find a home for this person’s reverse mortgage. Thanks for visiting www.reverse-mortgage-information.org.

59. can one re-finance a reverse mortgage,after a few years on the program?

    You can refinance if there is a net benefit to the borrower. HUD has a so called 5 to 1 rule where they want the borrower at minimum, to see a return of 5 times the cost of the refinance. Since the mortgage insurance is less on a refi, its a bit easier to meet that 5 times rule but there are lenders that will allow a refinance if there is a 20,000 benefit to the borrower but the borrower has to sign a disclosure saying they need the difference in returns. Please let us know if you need additional information.

60. 1. How many years of payments are typical?
    2. Do payments change if market value changes over the period of the loan?
    3. Since the homeowner retains ownership of the home, I assume they are still responsible for all maintenance needs as usual?

    1. There are no payments
    2. There are no payments
    3. Borrower is responsible for taxes, insurance and home upkeep

    Lets get back to your first 2 questions- this is a big one in that there are never payments on a reverse mortgage. Any money that you use from the reverse, whether you take monthly payments or you take little bits when you need them, are paid back when you either sell the home or the last remaining owner passes away. The proceeds from the sale of the home pays back the balance and all…ALL remaining equity goes back to the heirs or the estate.