Reverse Mortgage Program
A reverse mortgage is an exceptional financial tool that allows homeowners over the age of 62 to draw against their home’s equity. The funds are tax-free and no repayment is required until the homeowner permanently leaves the home. One major benefit of a reverse mortgage is that your mortgage is paid off, so the stress of having a monthly mortgage payment is gone. Another benefit is that the funds do not affect Medicare or social security.
Here are a few commonly asked questions that will help you better understand the reverse mortgage program:
Do you have monthly payments?
You do not have any monthly payments. You are still required to pay the taxes and insurance on the home.
Can I end up owing more than the value of my home?
You can never owe more than your house is worth.
Is there a chance I may lose my house?
With a reverse mortgage, there is no risk of losing your home. You will continue to remain the title holder and retain ownership.
How do I receive the proceeds from my reverse mortgage?
You can receive your proceeds as a lump sum payment, as a line of credit to draw off as needed, as a monthly payment plan or a combination of these options.
Will I owe taxes on the proceeds?
Reverse Mortgage loan proceeds are not considered income and will not be taxed or affect Social Security or Medicare benefits.
Are there any restrictions on how I use my Reverse Mortgage proceeds?
Reverse Mortgage proceeds can be used for anything:
- Home Repairs
- Medications/Medical Bills
- Credit Card Bills
- Gifts to Children – college expenses, new home, etc.
How does the repayment process work?
The loan is due when the homeowners are no longer permanently living in the home. Most people will sale the house, pay off the reverse mortgage and whatever money is left over is theirs or the heirs. If it is a spousal situation, no repayment is required until both parties no longer live in the home.
Prior to any documents being processed, all applicants must receive a Certificate of Counseling from an approved agency.