False. As the borrower, your name remains on the title and the home is still yours—just as it would be with any mortgage. You’re required to continue paying real estate taxes, homeowner’s insurance, and providing basic maintenance to your home. Once you no longer live in the home as your primary residence, the loan balance, including interest and fees, must be repaid.* This is usually done by the homeowner or their estate selling the house.
False. Many Homeowners age 62 and older are now using a reverse mortgage strategically as part of a sound financial plan. For example, a reverse mortgage line of credit can serve as a cash reserve that you can tap as needed. (And unlike a traditional Home Equity Line of Credit, the unused reverse mortgage credit line actually grows over time.) Or, monthly advances can help you supplement other retirement income, so you can avoid withdrawing savings or liquidating invested assets. In any case, no monthly mortgage payments are required,* which can improve your cash flow and help you live more comfortably. Your from will be pleased to work with you and your financial advisor to develop a solution that’s right for you.
False. Reverse mortgage proceeds can be used in multiple ways. Among the most common uses are paying off an existing mortgage or other debt in order to have no monthly mortgage or debt payments; creating a cash reserve; supplementing monthly income; paying for home improvements; or covering medical bills or long-term care expenses.
False. A HECM (Home Equity Conversion Mortgage) reverse mortgage
is insured by the Federal Housing Administration. This insurance feature guarantees that you will never owe more than the value of your home when the loan becomes due. No debt will be left to your heirs. And if the loan balance is less than the market value of the home, the additional equity is retained by the homeowner/heirs (if the home is sold).
Not so. With most financial products, there are a number of factors to consider before you can choose what’s best for you. With , you can rely on your to be a trusted resource for clear information and responsible guidance. In addition, before you apply for a government-insured Home Equity Conversion Mortgage, you are required to receive reverse mortgage counseling from a third-party counselor who’s approved by the U.S. Department of Housing and Urban Development (HUD). These independent counselors are not affiliated with , and their job is to ensure you fully understand every aspect of your reverse mortgage.
The funds can be used in multiple ways, including supplementing your income, paying for a large expense, or preparing for future needs. As you explore your reverse mortgage options with , an experienced Reverse Mortgage will serve as your guide throughout the entire loan process. Here’s a basic overview of what you can expect:
1. One of our experts will contact you to:
2. Independent Counseling
To ensure that you understand all aspects of a reverse mortgage, you’re required to have a counseling session with an independent counselor who’s approved by the U.S. Department of Housing and Urban Development (HUD). It usually takes about 60 to 90 minutes and can be done in-person or over the phone. (Some states require face-to-face counseling.)
4. Processing Approval
We will submit the paperwork and we’ll process your application. We’ll order a home appraisal, which determines the exact value of your home. We’ll also order title work and existing mortgage payoff amounts. An underwriter will then review the application for approval.
When the final loan documents are ready for your signature, we’ll contact you to schedule your loan closing, which can take place at your home.
Any existing mortgage(s) must be paid off with a portion of
the proceeds from your reverse mortgage. After the closing and any applicable rescission period, the loan will fund and you’ll receive your money.
Unlike a traditional home equity loan or home equity line of credit, a reverse mortgage doesn’t have to be repaid until the last surviving borrower or an eligible Non-Borrowing Spouse, if applicable, no longer lives in the home, or the home is sold. If the borrower does not meet loan obligations such as taxes and insurance, and maintaining the condition of the home, then the loan will need to be repaid.
To be eligible for a reverse mortgage:
All titleholders must be age 62 or older.
The home must be the borrowers’ primary residence, and must meet Federal Housing Authority (FHA) minimum property standards.
You must have sufficient home equity.A from cantellyouif you have enough home equity to qualify.
No. Just like a traditional mortgage, as long as the terms of the loan are met,* the borrowers retain full homeownership and can sell the home at any time.
This is determined by the age of the youngest borrower, or eligible Non-Borrowing Spouse, your home value, the amount of equity, FHA lending limits, the current interest rate, and the reverse mortgage product and payment option you choose. A from can provide you with a quote that’s tailored to your specific situation, with no cost or obligation.
You can take your funds as a lump sum; monthly payments for a specified time period, or for as long as you live in the home; a line of credit; or a combination of these.
The HECM reverse mortgage is insured by the Federal Housing Administration (FHA) to protect lenders and borrowers alike. This insurance guarantees you will receive your loan proceeds as agreed upon with the lender at the closing of the loan.
In addition to interest, the costs include a title fee, credit report fee, real estate settlement closing costs, a property appraisal fee, origination fee, closing costs, mortgage insurance premium, servicing fee and a modest charge for HECM counseling. While closing costs vary based upon the type and size of the loan, they’re the same as those for any traditional mortgage.
You can roll most of the up-front costs into the loan, so out-of- pocket expense can be minimized. We will be pleased to give you a detailed cost breakdown.
*The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.