For many seniors, Social Security alone does not provide enough income to live a comfortable retirement. Many seniors must look for alternative solutions in order to make their monthly financial obligations.  A reverse mortgage is one of those financial solutions.

What is a reverse mortgage?

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 however they see fit.

What are the qualifications?

In order to qualify for a reverse mortgage, the borrower must be a homeowner, at least 62 years of age, and reside in the home as a primary residence. There are also no income or credit requirements to qualify for a reverse mortgage.

What is the process of a reverse mortgage?

One Reverse Mortgage breaks up the reverse mortgage process into 5 simple steps.

  1. Determine your goals. Once they understand your current situation, One Reverse Mortgage can determine if a reverse mortgage is a good fit for your needs.
  2. Complete your application and attend a counseling appointment. A licensed expert will review your application with you a provide you with all the essential information you need to set up your counseling appointment.
  3. Next comes your appraisal. An independently approved FHA appraiser will come out and appraise your home.
  4. Closing and disbursement follow the appraisal. Once the loan is approved a final signing is scheduled where closing costs and the interest rate is calculated. After the closing of the loan you have three business days to cancel. After this three day period has passed, you will begin receiving payments according to whichever payment option you selected that best suited your unique loan.
  5. The last step to the reverse mortgage process is the repayment. There are absolutely no monthly payments made.* The reverse mortgage balance only becomes due when the home is sold, the home is no longer a primary residence, or the borrower passes away. You are responsible for taxes, insurance, and maintenance of the property. In the event that the borrower passes the home may be repaid by the sale of the home or refinancing of the existing reverse mortgage. The remaining equity belongs in full to the heirs of the estate.

Does a reverse mortgage affect Social Security or Medicare benefits?

Social Security and Medicare are government entitled programs, and are not affect by reverse mortgages**. However, Medicaid is a need-based program that can be affected.

When does the loan need to be repaid?

A reverse mortgage only becomes due when all homeowners have either moved out of the property for 12 consecutive months or have passed away. You are never responsible for paying back the loan while you are still living in your home

Can you ever owe more than your home is worth?

No, reverse mortgages are “non-recourse” loans, this means that the borrower or heirs will never owe more than the loan balance or value of the property (whichever is less). Also, no assets other than the home itself can be used to repay the debt.

A reverse mortgage can give you the financial freedom you need to make your retirement more enjoyable.

*Homeowner is still responsible for taxes, insurance and property maintenance.
**May affect SSI or Medicaid. Please consult with your financial advisor.