Top 5 Reverse Mortgage Questions
Today, a Reverse Mortgage is becoming an increasingly popular way for seniors to supplement their retirement, offering a secure option for accessing cash based on the equity in their homes. Here are the answers to common questions you may have about Reverse Mortgages:
1. What is the difference between a Reverse Mortgage and a home equity loan?
With a traditional mortgage or home equity line of credit, you must meet minimum income and credit requirements to quality for the loan, and you have to make monthly loan payments. With a Reverse Mortgage, there is no credit score and generally no income requirements, nor do you make monthly mortgage loan payments
2. Do I have to repay a Reverse Mortgage loan?
Yes, eventually. However, your payment is not due on your Reverse Mortgage loan as long as you maintain it according to FHA requirements and otherwise comply with the loan terms, it is your primary residence, you maintain it according to FHA requirements, and you pay required property taxes and insurance.
3. Do I still own my home with a Reverse Mortgage?
Yes. You keep the title to your home; the lender does not become a titleholder. You own and can remain in your home as long as you meet all the Reverse Mortgage requirements. You cannot lose your home under normal circumstances, but please understand foreclosure may occur if you do not pay your taxes and insurance and otherwise comply with the loan terms.
4. Are there any restrictions on how I use the money I receive?
No. You can use the money from your Reverse Mortgage loan any way you like. Many people put the proceeds into a line of credit account for home repairs or improvements. Others use it to pay for in-home health care, medical costs or property taxes. You can even use it for a vacation, a new car or to help your grandchildren pay their college expenses. Use it however you want – it is your money!
5. Do I have to pay income taxes on the money I get from a Reverse Mortgage?
No. Because funds from Reverse Mortgages are considered loan proceeds and not income, the money you receive is not taxable income.
Bonus! Who will help me through this process?
Terri Brady and Dan Mudd, Standard Bank’s Reverse Mortgage specialists will be happy to assist you in any way they can! Call toll-free 855-206-1936 or click here to request a consultation.
New! - Try our Reverse Mortgage Calculator.