Secure Living Loans
Improving Lives and Fulfilling Dreams
Fast Facts
What is a Reverse Mortgage?
A Reverse Mortgage is a loan against your home that you do not need to pay back as long as the home remains your primary residence.
Who is eligible?
Homeowners who are 62 years or older.
What types of homes are eligible?
Single family dwellings or a two-to-four unit property that you own and occupy. Condominiums and some manufactured homes are also eligible. Condominiums must be FHA-approved.
How is a Reverse Mortgage different from a refinancing or a bank equity loan?
A traditional mortgage or home equity loan requires you to have sufficient monthly income vs. debt ratio to qualify. This is because you have to make monthly payments to repay the loan.
Do I need a minimum monthly income to qualify?
Since there are no monthly payments, you do not need a minimum monthly income to qualify for a Reverse Mortgage.
What if I have a bad credit history?
Reverse Mortgages are not based on credit history. (All liens or judgments that would affect the lender’s first lien status must be satisfied.)
How is the money dispersed to me?
You choose:
- All at once, in a lump sum
- Monthly, tenure or term cash advances
- As a credit line
- Some combination of the above
How much money can I get?
It depends on the specific Reverse Mortgage plan or program that you choose. It also depends on the way you opt to receive your cash. However, a typical rule of thumb is: the older you are and the more your home is worth, the more money you are eligible for.
What if I still owe money on my house?
Reverse Mortgages have to be “first” mortgages. Therefore, if you still owe money on your home, you need to do one of two things: either pay off your current mortgage before applying for a Reverse Mortgage, or pay off your first mortgage with the money that you get from your reverse mortgage.
Do I still have to pay property taxes?
Oh yes. Remember, you are still the owner of your home. Therefore, you do still need to pay your property taxes and any other homeowner expenses (homeowner’s insurance, home maintenance costs, etc.).
What can I use the money for?
Anything you want. It’s your money. Here are some suggestions:
- Provide a cushion for the unexpected
- Fund home repairs
- Eliminate existing mortgage payments
- Establish a resource to help grandchildren and loved ones
- Reduce debt
- Long term care insurance or medical expenses
- Estate planning tool
OK, so what’s the catch?
Of course the money needs to be repaid sometime. The mortgage becomes due and payable when:
- The last surviving borrower dies.
- The home is sold.
- All the borrowers permanently move out of the home (no longer live there for one continuous year).
The mortgage may also be due if:
- Property taxes are not paid.
- The home is not properly maintained.
- The home is not insured.
- Fraud and other standard default conditions.
What happens to my estate? Will my heirs inherit anything?
When the mortgage is due, your estate will repay the cash you received through the mortgage (plus interest and fees). The remaining equity belongs to your heirs. None of your other assets will be affected by the repayment.
What are the costs?
Costs vary from one program to another. That’s why we offer a variety of programs to meet a variety of needs. Most Reverse Mortgages have costs similar to traditional mortgages such as interest charges, origination fees, closing costs, inspections and insurance. Almost all of the costs are financed into the loan and are not required up front.
What should I consider if I’m interested in a Reverse Mortgage?
You should ask yourself these key questions:
- Who else should I involve in considering this loan? My spouse? My heirs?
- Have I given due consideration to all my choices?
- When would be the best time to take out a Reverse Mortgage?
- What Reverse Mortgage product should I select?
