Reverse Mortgage FAQs

Because Reverse Mortgage loan programs differ greatly from typical “forward” mortgage programs, this usually generates lots of questions.  If you have a question that isn’t listed here, please comment below or contact us.

Here are some commonly asked questions:

– Am I selling my house ?

No, you still own your home. You simply have a mortgage on it but there are NO PAYMENTS to make on the mortgage.

-Can I get a Reverse Mortgage if I already have a mortgage on my house ?

This will depend on how much is owed on the current mortgage.  Generally speaking if you owe approximately 50% or less of the current appraised value of your home you can get a reverse mortgage.

– Are there any payments to make on a Reverse Mortgage ?

No.  You will not have to make payments towards the reverse mortgage loan.

– Who owns  my house ?

You continue to own your house and will continue to pay your property taxes and homeowner’s insurance.

– How much money am I entitled to ?

This will depend on 3 factors:

  1. The age of the youngest borrower,
  2. The appraised value of the house and
  3. The current interest rate when the application is drawn up.

– Can I sell my house later?

Yes, at any time the house can be sold if the homeowner decides to move.

– If I have a Reverse Mortgage now, can I refinance it ?

Very often, the answer is yes.  It will depend on whether the house has gone up in value since the last reverse mortgage.  Please call for additional details.

– Can I BUY a house with a Reverse Mortgage ?

Yes.  Reverse mortgage loans can be utilized to purchase homes and condominium units.

– Is the Reverse Mortgage safe ?

Yes.  It is insured and regulated by the Federal Housing Administration ( FHA ) and is THE most regulated mortgage that we have in the county.

– Can children inherit the house?

You should have a current Will that will leave the house to your children.  When they inherit the house they have the choice of selling it or refinancing the reverse mortgage.   The remaining amount of equity in the house will probably be a deciding factor and this usually depends on how healthy the real estate market is at that future date.

– Will my children owe anything to the bank if I take out a Reverse Mortgage ?

NO.  It is your house and your mortgage.   Children and / or heirs are not responsible for the amount that is owed in any way.

– What is ‘counseling’ ?

It is a Federal Requirement that everyone who applies for a Reverse Mortgage must speak to an independent counselor.  This is for your protection and is usually done on the phone.

– Are there any restrictions on what I can do with the money I get from my Reverse Mortgage ?

NO.  Any money that you receive can be used to put in the bank, buy a winter vacation house, upgrade your house, help your family, buy investment property or help with medical expenses.  There are no restrictions at all on what you do with your money.

– What types of houses are considered primary residences ?

1 to 4 family owner occupied properties, HUD approved condominiums & trailers if the owner of the trailer also owns the land beneath the trailer.

Article written by Lou Romney, the reverse mortgage loan affiliate of ReadySetLoan.com.  Please direct any all reverse mortgage-related questions directly to him or by commenting below.  He will be happy to answer any of your questions.

askLou

 

lou_romneyLou Romney
Tel: (203)874-3883
NMLS License #14119
Reverse Mortgage Professional
LouRomney@outlook.com
Continental Funding Corp. – NMLS #115571
30 Albert Street
Milford, CT 06460

 

Top Photo Credit: (c) Can Stock Photo / KenHurst

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