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, everyone on title must be at least 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:
- The age of the youngest borrower.
- The current interest rate.
- 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.