Reverse Mortgage Questions - FHA Reverse Mortgages (aka HECM’s) really are a safe, secure loan. I frequently find my clients have a few misconceptions. I’d like to take this opportunity to answer some of the most common questions and myths and I hope you will comment on my posting!
- How much can a senior homeowner borrow?
Loan amounts are determined by three factors.
Age of the youngest borrower (the older you are the more you can borrow) Home value (the higher the home value, the more you can borrow with a cap on calculations at $625,500) Current interest rates.
- Does the bank get my home?
No. You remain the owner of your home and can stay as long as you wish. You must pay property taxes, keep the home insured and maintain the home. When your home is sold, the reverse mortgage is repaid (along with accrued interest and anyfees) and any remaining equity goes to you or your heirs.
- Can I qualify for a reverse mortgage if I already have a home loan (or two)?
Absolutely, IF you qualify for enough reverse mortgage funds to pay off your existing mortgage(s) or are willing to provide any shortage. I have had homeowners willing to bring funds to closing in order to obtain the benefit of no more mortgage payments! Bye bye house payment!
- Are there any income/credit score requirements?
Not really. Because you don't make monthly payments on a reverse, your income and credit score are NOT required. HOWEVER, you must not have a recent foreclosure or any defaulted federal debts.
- What if I outlive the Reverse Mortgage?
You cannot outlive a reverse mortgage. The actual due date is 150 years from the date of the youngest borrower OR when the last remaining borrower no longer lives in the home. No matter if you run out of equity or become “upside down” on the debt, owing more than value. Your obligation remains the same - Live in the home, maintain the home, keep the property taxes and insurance current. Period.
Thank you for reading my post, and if I can ever answer any questions for you or a senior you know about reverse mortgages. Please give me a call or shoot me an email.
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