Frequently Asked Questions
Questions and Answers about Reverse Mortgage Loans
- Do I have to be a certain age to be eligible for a reverse mortgage?
At least one spouse must be at least 62 years of age or older. The mortgage will be based upon the youngest borrower’s age.
- Will I still retain ownership and title of my home?
Yes. You retain title to your home during the period when you have a reverse mortgage, just as you would with a traditional home mortgage. All we ask is that you, as the homeowner, continue paying property taxes and insurance, maintain the home in good condition, and reside in the home as your primary residence.
- What happens to my spouse if I pass away first?
If your spouse is a co-borrower of the loan, he or she can continue to live in the home and continue to receive the existing benefits as long as the home is maintained and taxes and insurance are paid. Repayment would not be required at that time, unless your spouse is not a co-borrower on the loan, or until your spouse passes away or decides to move, at which time the loan balance would be due.
- What if I decide to sell my home?
As with a traditional mortgage, if you choose to sell your home, the outstanding loan balance becomes due and payable. You or your estate will receive any proceeds exceeding the loan balance.
- Can I be forced to sell or vacate my home if the money I owe on the loan exceeds the value of my home?
No. As long as you continue to occupy the property as your primary residence, maintain your home in good condition, and continue to pay your taxes and insurance, you will not be forced to sell or vacate your home – even if the total of the mortgage payments made to you, plus interest, exceed the value of the property. The required Mortgage Insurance Protection (MIP) premium and monthly set aside protects you should your property value experience a decline.
- What if I move out temporarily, will the loan become due?
FHA’s policy states that if a borrower remains out of the home for 12 consecutive months, the loan would become due.
- When do I repay the loan?
Your loan comes due when the last remaining borrower sells the property, permanently leaves the home, or passes away. In addition, borrowers must continue adherence to the program guidelines.
Note: There are default measures that would require your loan to become due. This information is clearly set forth in the loan documents you receive should you decide on a reverse mortgage.
- How much will I owe at the end of my loan?
All the money borrowed, including any money used to pay the loan’s closing costs, all accrued interest, financial and service fees and MIP required for HECM loans.
- What if I owe more money than the home is worth?
The HECM reverse mortgage is a “non-recourse loan”. This means that the borrower (or his or her estate) will never owe more than the loan balance or value of the property, whichever is less, and no assets other than the home can be used to repay the debt. This applies only when the borrower or estate chooses to sell the property to pay off the reverse mortgage loan. If the borrower or estate wishes to retain the property, the balance must be paid in full. If there is money left after the existing loan is paid, the borrower or their estates receive the money.
- Will I still have an estate that I can leave to my heirs?
When you sell your home or no longer use it for your primary residence, you or your estate will repay the loan amount you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs.
- How long do the heirs have to sell the property?
They have 6 months. HUD may grant an extension beyond that time as long as property taxes and insurance are paid and the home is maintained in good condition.
- How do I qualify for a reverse mortgage loan?
To qualify, you must be age 62 or older and be the titleholder to your home. In addition, you must have sufficient equity in your home.
- Will I still own my home or will I lose it?
You will still own your home and you can stay in it for as long as you wish, provided you pay your taxes, insurance and maintain the home according to FHA requirements.
- What if I want to leave our home to the kids?
You can still leave it to your children, or to anyone you choose. When the loan becomes due, you or your heirs have the option of paying off the full balance of the loan and keeping the home.
*This material is not from HUD or FHA and has not been approved by HUD or a government agency.