Reverse mortgages are available to homeowners that are age 62 and older. All persons listed on the deed to the property must be at least age 62. The borrower must occupy the property as his primary residence and all existing liens must be paid off at the time of settlement. Thus, the proceeds of the reverse mortgage are available to pay off any outstanding mortgages against the property. As an additional safeguard, HUD requires that each potential reverse mortgage borrower be advised about the reverse mortgage program by an independent HUD-approved counseling agency. This counseling is free of charge to the borrower.
WHAT CAN I DO WITH THE PROCEEDS OF THE REVERSE MORTGAGE?
- Free up monthly income.
- Do home improvements.
- Pay off credit card debts.
- Pay for in-home health care.
- Purchase long-term care insurance.
- Supplement income.
- Plan your estate.
- Purchase a car.
- Prepare for emergencies.
- Purchase a new home or condominium.
- Pay off your existing mortgage.
- Anything you want!
WHAT ARE THE BENEFITS OF A REVERSE MORTGAGE?
There are several benefits associated with the reverse mortgage. First, there are no income or credit requirements when qualifying for this loan. Second, the money received from this loan is not taxable as income. Third, the borrower has no repayment obligations until the property is no longer his residence. Thus, the borrower may live in the property until his/her death without ever making a payment back to the loan. Another significant benefit of this loan is the security of knowing that reverse mortgages are fully insured under the federal government's Federal Housing Administration's mortgage insurance program.