How Can I Qualify for a Reverse Mortgage Loan?
The Federal Housing Administration (FHA) uses the following to determine if there is enough equity in the home:
- Current interest rate
- Whether the rate will be variable or fixed
- Age of the youngest homeowner
- FHA lending limits
- Appraised value of the home
How Much Can I Receive?
The amount that can be borrowed will depend on three things: age, current interest rate, and the appraised value of the home. Use a reverse mortgage calculator to estimate what you may be eligible to receive.
Are There Limits To How I Can Use the Funds From a Reverse Mortgage Loan?
No. As long as any existing mortgages on the property are paid off upon closing of the loan and all required property taxes and insurance are maintained, borrowers may use the loan proceeds however they wish.
How Will I Receive My Reverse Mortgage Funds?
You will receive the proceeds from a reverse mortgage loan in any of the following ways:
- Lump sum – a lump sum of cash at closing.
- Tenure – equal monthly payments as long as the homeowner lives in the home.
- Term – equal monthly payments for a fixed number of years.
- Line of Credit – draw any amount at any time until the line of credit is exhausted.
- A combination of the options above.
When Does the Loan Become Due?
Your loan will become due when under any of the following circumstances:
- The borrowers have passed away
- The property is in disrepair and is unable to make or has refused to make repairs
- The borrowers have sold the home
- The property is no longer the principal residence of at least one borrower
- The borrower does not live in the property as their primary residence
- The borrower fails to pay required property taxes and/or insurance