Common questions we receive from our borrowers.

Below is a list of some of the most frequently asked questions we receive from our clients and their families.

Since the reverse mortgage's inception in 1988, there have been LOTS of changes to the program.  We've created this page to help you with some of the most basic questions we hear daily.

Do I qualify for a reverse mortgage?

There are minimum qualifications that must be met and it's best to call us for a detailed conversation about your situation.  As an overview though, the minimum age is 62 years old and the home must be their primary residence.  Effective in 2015, all borrowers must also meet income and credit guidelines established by FHA.

How much do you qualify for?

There is an FHA calculation that determines how much you qualify for and it's based on a few factors:

  1. The age of the youngest borrower.
  2. The current interest rate.
  3. The lesser of the appraised value or the maximum lending limit (currently set at $679,650).

When does the reverse mortgage get paid back?

The reverse mortgage becomes due when the last borrower permanently vacates the home.  This is normally when they pass away.  The heirs list the property for sale and pay off the reverse mortgage through the proceeds of the sale.


Can I use a reverse mortgage to purchase a new home?

Yes.  Effective January 2009, FHA now allows the "HECM for Purchase" program.  This loan is designed for borrowers that no longer want to stay in their existing home.  Instead of establishing a line of credit or receiving a monthly tenure/term payment from the lender, the reverse mortgage is used to acquire the new home.  Borrowers will typically need approximately 50-55% of the purchase price as down payment.

What if my home needs repairs?

The HECM is an FHA insured loan, so it requires an FHA appraisal to be completed on the property.  If there are repairs required to meet the FHA minimum guidelines, and they're cosmetic in nature, we can establish what's called a "repair set-aside".  This is money that's held back at settlement to cover the expense of the repairs to be completed AFTER closing on the reverse mortgage.

Are condominiums allowed?

The short answer is yes, condos are allowed.  But the association must be FHA approved.  If you're unsure whether your association is FHA approved, you can search it on FHA's website by clicking here.

Do I still qualify if I currently have a mortgage or HELOC?

YES!!  The majority of our reverse mortgage borrowers currently have a loan on their property.  Normally that's their primary purpose for doing the reverse mortgage - to eliminate their current monthly principle and interest payments.  The only catch is there must be enough equity in the property to satisfy ALL liens in FULL.  The reverse mortgage must be the first and only lien on title when you go to closing.