A reverse mortgage is a financial solution for senior homeowners 62 and older. Also known as HECM (Home Equity Conversion Mortgage), a reverse mortgage, allows the homeowner to pay off their current mortgage, continue to live in their home, pay their bills, and use the remaining money of the loan with no restrictions. ( For information on frequently asked questions click here)

What are the benefits of a reverse mortgage?

Though they aren’t for everyone, reverse mortgages have helped many senior citizens improve their lives and help them to stay in their homes. These are some basic benefits of a reverse mortgage.

No Income Requirements

One benefit to a reverse mortgage is that there are no income requirements, and you will not be denied from this program due to income level.

No Credit Score Requirements

There are also no credit score requirements; you are still able to obtain a reverse mortgage even if you do have a low credit score.

No Monthly Payments*

With a reverse mortgage you do not make any monthly mortgage payments.* You are only responsible for property taxes, insurance, and maintenance .

You are Always the Owner of Your Home**

Another benefit of a reverse mortgage is that you still own your own home. A common misconception with reverse mortgages is that the lender will now own your home, and this is not true. A reverse mortgage does not in any way change the title of your home.

You Still Have the Option of Leaving Your Home to Your Children

A major concern people have with reverse mortgages is that they will not be able to leave their home to their children. However a reverse mortgage does allows your kids to keep the home if they choose to, but they will have to refinance the entire amount of the existing mortgage. If they decide to sell the home they can keep the difference between the loan amount and the proceeds; the lender absorbs the difference in cases where the proceeds are not enough to pay off the full value of the loan.

Now that you the benefits of a reverse, you will need to know now it works.

Here are your loan options with a reverse mortgage.

HECM Fixed

This mortgage product is designed for people with higher mandatory obligations such as a current mortgage balance, home repair requirements, and property liens. With this product the low fixed rate will remain the same throughout the life of the loan and you receive your money in one lump sum at closing.

HECM Line of Credit

Everyone that qualifies for a reverse mortgage has the option to use the HECM line of credit reverse mortgage product. There are a few ways in which this product can work; one option lowers your initial money disbursement, which then lowers your closing costs. A few other options include receiving smaller monthly amounts of your money, a full draw on your line of credit at the loan’s closing, accessing your line of credit when you need to, or any combination of these.

Who can qualify for a reverse mortgage?

To qualify for a reverse mortgage you must reside in the home as a primary residence, be at least 62 years of age or older, have a sufficient amount of equity in your home, and complete a HUD (Housing and Urban Development) approved counseling appointment.

*Homeowner is still responsible for taxes, insurance and property maintenance.
**You remain responsible for counseling costs, taxes, insurance and maintenance expenses.