FAQs

Quick Facts

HECM (Home Equity Conversion Mortgage) Loan – also known as a Reverse Mortgage – can be an important financial option for seniors, their family members, and financial professionals to consider as part of an overall retirement planning strategy or to help meet cash flow needs.
Over the Past 50+ years the Reverse Mortgage has positively grown in popularity and has developed into an intelligent option to increase the financial independence for homeowners 62 years of age or older.

Benefits

  • No Monthly Mortgage Payment
  • Allows you to stay and age in the comfort of your home and maintain the title
  • Turn your home's equity into cash that you can access
  • The available funds from your Reverse Mortgage line of credit that are not used, is guaranteed to grow annually
  • A Non-Recourse Loan since it’s Federally Insured by FHA (Federal Housing Administration)

Eligible Homes

  • Single Family Residence
  • Townhome
  • 2-4 Unit Owner Occupied
  • Manufactured Home that meets FHA requirements

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The History

AARP defines a Reverse Mortgage as: A Reverse Mortgage is a loan against your home that you do not have to pay back for as long as you live there.
The Reverse Mortgage began as early as 1961. In 1989, FHA (Federal Housing Administration) insured the first HECM (Home Equity Conversion Mortgage), otherwise known as a Reverse Mortgage, to Marjorie Mason of Fairway, Kansas. The Reverse Mortgage was written to help Marjorie, who was a widow, stay in her home despite the loss of her husbands income. To this day Reverse Mortgages continue to help homeowners 62 years of age or older with many benefits.

Frequently Asked Questions

Yes, the property taxes and homeowners insurance is required to be paid just like a traditional mortgage.
No, you are not required to make the mortgage payment – however, if you choose to you can.
Yes, refinancing your reverse mortgage with another reverse mortgage is an option which could give you access to additional equity to convert into cash.`

Yes, a Reverse Mortgage is like a debt consolidating refinance, with the benefit of no mortgage payment. You can pay off:

  • Existing debt
  • Existing Mortgage Balance

The exact amount depends on the following:

  • Your Age
  • The type of Reverse Mortgage selected
  • Current Interest rates
  • Appraised value of your home

As a safety feature, HUD regulates the amount of money that can be withdrawn during the first 12 months of your Reverse Mortgage. After 12 months, the remaining funds are available to use anytime. This is to help preserve and grow your home equity for a longer period of time.

Yes, a HECM (Home Equity Conversion Mortgage) is the “official term” for a Reverse Mortgage.
A reverse mortgage can be used to pay off debt. It can also be used to supplement your retirement income, cover medical costs, and so much more.
A Reverse Mortgage is a loan that allows homeowners 62 years of age or older the option to convert the equity in their homes into cash to be used for many benefits. In addition, a Reverse Mortgage allows the homeowner to no longer have a mortgage payment.
Yes, you still 100% own your home, the bank is not the owner of your home, just like a traditional forward mortgage the bank is simply the lender and you are the home owner.
Yes, you will still remain on title. You still own your home.
Yes, your heirs will have the option of retaining the house through a refinance or they can sell the home and keep the proceeds.
  • Borrower(s) must be 62 years of age or older to be on title
  • The home must be your Primary Residence
  • Meet with a HUD (Department of Housing and Urban Development) Reverse Mortgage Counselor

There are several options for how you can receive your funds.

  • Line of credit (access funds when needed)
  • Lump sum
  • Monthly
  • Combination of all of the above

A Reverse Mortgage has superior advantages over a home equity loan or home equity line of credit.

  • With a home equity loan or home equity line of credit, you must make monthly principal and interest payments. With the Reverse Mortgage there are no monthly payments.
  • With a home equity loan or home equity line of credit the unused line of credit does not grow. With a Reverse Mortgage the unused line of credit will increase each month. The growth rate is equal to the sum of the interest rate plus the annual mortgage insurance premium rate being charged on your loan.
  • With a home equity loan or home equity line of credit the bank can arbitrarily freeze or reduce your line of credit. With a Reverse Mortgage this will never happen.
No, the loan proceeds from a Reverse Mortgage are not taxable, the money is considered a loan and not income. (For further details please consult a licensed tax advisor)
The remaining borrower continues to own, live in the home, and enjoy all the benefits of their Reverse Mortgage.