Reverse Mortgages FAQ

	Do I qualify for a Reverse Mortgage? You must be at least 62 years of age and own a home as your primary residence. You must have enough equity in the home to pay all mortgage and lien obligations.
	How much money can I get? It will depend on your age at the time of closing, the value of the house, and the amount of mortgages or liens.
	Does the bank hold title to my house? No. You will retain title to your house. The bank holds a lien against the property, just like a traditional mortgage.
	My spouse is not 62, can they remain on title? All borrowers must be at least 62 in order to receive a reverse mortgage. If you are considering removing your spouse from title to obtain a reverse mortgage we recommend that you seek legal counsel and independent tax advice regarding your particular situation.
	What costs are associated with a reverse mortgage? The costs will include an origination fee, MIP (mortgage insurance premium), an appraisal fee, a flood certification, title and settlement fees and other standard closing costs.
	Are there additional fees during the course of my loan? There are no additional closing costs during the life of the loan. The Lender has set up an account from which your monthly servicing fee will be deducted. Any amount remaining in the servicing fee account not used during the life of the loan will be credited at the time the loan is paid.
	Is it required that I receive loan counseling before obtaining a reverse mortgage? Yes. Counseling is required by the federal government to protect borrowers and provide them with independent information regarding reverse mortgages. The Lender must receive your counseling certificate before they can close your loan.
	Will I be taxed on the funds I receive from my reverse mortgage? The disbursement of funds on your reverse mortgage is not considered additional income. All funds from a reverse mortgage are tax free.
	Are there limitations on how I can use the money from my reverse mortgage? No. You may use the funds as you wish.

Children and Heirs FAQ

	Will Mom and Dad use up my inheritance? As with a traditional mortgage, a reverse mortgage will effect the equity in your parent’s home. However, they will be able to live comfortably while using the equity in their home to pay for expenses, medical care or other needs.
	How much money will they owe when the loan has to be repaid? Your parents will owe the total of the amount borrowed, accrued mortgage interest and any other costs and fees financed through the loan amount.
	When is the loan repaid? The loan can be repaid at any time without penalty. There are several events that can also require payment to be made. Generally, payment is made when the borrower no longer resides at the property or is deceased.
	What happens to the house if they move into a senior care facility? A reverse mortgage becomes due and payable when the last borrower moves out of his or her home permanently. For instance, moving into a senior care facility, selling the home, passing away, or moving in with children.
	What happens if the loan balance becomes greater than the value of the home? The Home Equity Conversion Mortgage (HECM) is a non-recourse loan. This means that the borrower can never owe more than what the house is worth. Your parents pay a mortgage insurance premium to the U.S. Department of Housing and Urban Development (HUD) at closing. HUD guarantees that the that the borrower will never owe more than the value of their home when the loan becomes due and payable.