FAQ
What are the age qualifications for a reverse mortgage?
Reverse mortgages are for homeowners at least 62 years of age with equity in their home.
Is it possible to get a reverse mortgage if there is already an existing mortgage on the home?
Yes, but any existing mortgage must be paid off when the reverse mortgage closes. The funds from the reverse mortgage can be used for that purpose.
Does a home in a “living trust” qualify for a reverse mortgage?
In most cases, the answer is yes. As a part of the loan process, you will need to provide a copy of the rust or a Certification of Trust for review by the lender and title company.
Does a home in foreclosure qualify for a reverse mortgage?
In most cases, the answer is yes. There must be enough quality in the home to pay off the balance of the existing loan. This includes any late fees, attorney’s fees or any other fees connected to the foreclosure.
Is there any tax liability for the reverse mortgage proceeds?
No, funds received from a reverse mortgage are generally categorized as loan advances and not taxable income. Consult your tax advisor for information.
Can the interest charged on loan principal be deducted for tax purposes?
The interest that accrues on your loan is generally deductible when the loan is repaid, which occurs when the last borrower permanently leaves the property. Consult your tax advisor for more information.
How do proceeds from a reverse mortgage affect Social Security, Medicare or pension benefits?
The benefit from a reverse mortgage typically does not affect these benefits. Consult your financial advisor or local senior agency for more information.
Does the lender take the title of the home?
No. A reverse mortgage is only a lien against the property; therefore, the title will stay in your name.
Will my heirs have to sell the property to repay the loan?
No, the loan can be repaid by refinancing the existing reverse mortgage with a standard mortgage loan.
If there are no monthly payments, am I responsible for any other expenses related to the home?
You are required to pay your property taxes, home owners, and flood (if required) insurance premiums and other expenses necessary to maintain the home.
Will my heir have to sell the property to repay the loan?
No, the loan can be repaid by refinancing the existing reverse mortgage with a standard mortgage loan.
How will a reverse mortgage affect the future sale of the home?
The impact of a reverse mortgage is no different than that of a purchase or refinanced mortgage. Repayment of the mortgage is due upon sale of the home.