No, the lender will not own your home. Just like any other mortgage, with a home equity conversion mortgage, your name remains on the title. You still own your home.*
There is no credit score requirement. Throughout the loan process, we will look at credit history as part of the financial assessment to ensure you have the ability to pay your property taxes and homeowners insurance.
A home equity conversion mortgage is a non-recourse loan. That means you or your heirs will never owe more than your home is worth. If your home sells for less than what is owed on the loan, FHA insurance pays the difference.
Yes you can! In fact, many people use their reverse mortgage to pay off their existing mortgage. While you are still responsible for paying your property taxes and homeowners insurance, you can use your new loan to eliminate your current monthly mortgage payment.
If you have a mortgage, that will have to be paid off first. Any remaining money is yours to use however you wish! If you do not have a mortgage, there are no restrictions on how the money can be used.
Your heirs have a few options. They can sell the home to pay off the loan and keep any remaining money from the sale. They can keep the home. If they decide to keep the home, they can pay 95% of the appraised value of the home or the loan balance – whichever is less. The last option is to turn the loan over to the servicer take over to sell the property. This typically happens when an heir is not interested in keeping the home and the balance is higher than what the home is worth.
Absolutely not! The reverse mortgage program was created for seniors regardless of their situation or income level. Some may use the loan proceeds to pay off debts while others use it to live a more comfortable retirement without a required monthly mortgage payment.* Someone in a good financial position may actually benefit the most from a reverse mortgage.
Homeowners age 62 and older with enough equity in their homes to qualify.
Absolutely! We encourage family members to be involved in their loved one’s decision. It’s helpful for the client if everyone involved understands the program and the process. We can include family members on phone calls and send them educational materials.
No, you cannot lose your home for living longer than expected. As long as you maintain your home, stay current on your property taxes and homeowners insurance, and continue to live in your home, you cannot lose your home.
Any mortgage requires a credit review. A benefit with the home equity conversion mortgage is that there is no credit score required. We review your credit to determine if you are willing and able to meet your financial obligations such as paying property taxes, homeowners insurance, and home maintenance costs. This helps protect you from foreclosure for the reason of failure to uphold your ongoing financial obligations.
Financial assessment was put in place by the federal government to add more protection for seniors. The financial assessment process includes analyzing information such as the cost of the property taxes and homeowners insurance, the clients’ credit history, assets, expenses, and income. Going through this process helps borrowers understand their current financial situation and helps lenders determine if the borrower is willing and able to manage their financial obligations. If the borrower does not meet the criteria set forth by HUD in the Financial Assessment guidelines, the lender is required to withhold a Life Expectancy Set-Aside (LESA) from the loan proceeds to be used for payment of property taxes and homeowners insurance.