Community Advice Partnership for Smart Homeowners offers reverse mortgage counseling that will guide you through the process and enable you to get cash from your home. Until recently, there were two main ways to get cash from your home:
- you could sell your home, but then you would have to move; or
- you could borrow against your home, but then you would have to make monthly loan repayments.
Now reverse mortgages give you a third way of getting money from your home. And you don’t have to leave your home or make regular loan repayments.
A reverse mortgage is a loan against your home that you do not have to pay back for as long as you live there. It can be paid to you all at once, as a regular monthly advance or at times and in amounts that you choose. When you die, sell your home or permanently move out of your home the money and interest are paid back.
Frequently Asked Questions
How is a Reverse Mortgage different from a Home Equity Loan?
With a home equity loan you must make regular monthly payments to repay the loan. HUD reverse mortgages require no repayment until the home is sold or the last surviving borrower dies or permanently moves.
Who is eligible for a HUD Reverse Mortgage?
All borrowers must be at least 62 years of age. You do not need good credit to qualify.
What properties are eligible?
Your home must be a single-family home, a condo, townhome, duplex, triplex or fourplex. You must either own your home, or have a mortgage balance that can be paid off with the reverse mortgage.
Does the lender get the house?
No, you keep the title to the property. You are still responsible for property taxes, insurance and repairs.
How much can I get?
Your age or your spouse’s age (if they are younger), your home’s equity, and the interest rate will determine how much you can receive. For a more expensive home, not all of the home’s equity will be used to determine the maximum mortgage you can receive
Can I still sell my home later on?
You may sell the home at any time. When you sell, the mortgage would be paid off and you would keep the remaining equity.
How can I withdraw my equity?
You have several choices and you are permitted to change plans any time over the life of the loan. You can:
- Receive cash at closing.
- Receive monthly cash advances until you sell or leave the home.
- Receive monthly cash advances for a specified amount of time.
- Establish a line of credit for withdrawing money as you need it.
- Have a combination of a line of credit and monthly cash advances.
Are there closing fees or charges?
Yes. The price of the closing fees depends on the value of the home. The charges may be financed and may include closing costs, mortgage insurance premiums and lender servicing fees.
Are there restrictions on how I spend my equity?
No. A reverse mortgage can be used to meet a variety of needs including increasing your monthly income, paying property taxes, improving your home and other expenses.
Will this loan affect my retirement benefits?
No. There is no effect on Medicare, Social Security or pensions.
What if I’m currently receiving public benefits like Medical Assistance?
It is possible to use public assistance programs like Medical Assistance, food stamps or home health care and still obtain a reverse mortgage.
Why do I need to see a housing counselor before applying?
The US Government requires counseling by a HUD-approved housing counseling agency before you apply for any reverse mortgage. The counselor will explain the various reverse mortgage programs, help you evaluate your financial needs and provide information on other programs that may meet your needs. Family members are strongly encouraged to attend the counseling session. There is no cost or obligation for our services.