Just what is a Reverse Mortgage?

A Reverse Mortgage is a loan that enables homeowners age 62 and over to tap the equity in their home without having to make a mortgage payments, move, or sell the home. It truly is a “mortgage in reverse”.

How do I know if I can get a reverse mortgage?

Generally speaking, if all owners of the property are at least 62 years of age, and the home is owned free and clear, or a small balance remains on an existing mortgage, a reverse mortgage is possible. To find out the amount you qualify for, call us anytime at 800-216-6322 and our Certified Mortgage Planning Specialists will quickly determine your options at no charge. To get an idea of what you are eligible for, try our Reverse Mortgage Calculator that details the most popular programs.

What if we have low income or poor credit?

Credit and income are not considerations in qualifying for a Reverse Mortgage. The loan amount you qualify for is solely based on the age of the borrowers, the value of the property, and the current interest rates.

Can a living trust or other form of trust take out a reverse mortgage?

Yes, but subject to the conditions of the trust. The entire trust must be made approved by the underwriter of the Reverse Mortgage loan.

How do I get the money?

Since you are tapping your own equity in the property, it’s up to you. The only requirement is that any outstanding lien (mortgage or other debt against the home) on the property must be paid in full at the time the reverse mortgage is done. You then can take the remaining reverse mortgage funds as a lump sum, a line of credit that actually grows in value each year, or as a set monthly amount. And the best part of all is, you can take any combination of these choices. You may prefer some money as a lump sum to perhaps pay off bills, some as a line of credit to meet future needs, and some as a monthly amount to supplement your current income. You can even change your mind down the road. It’s your equity, it’s your choice. One of our Certified Mortgage Planning Specialists can assist you in determining the best option for you.

What can I use the money for?

Anything you want! Remember, the only requirement is that you pay off any liens against your home. After that, the funds from a reverse mortgage can be used for virtually any purpose. You can supplement your current income, pay off bills, make home improvements, travel, the list is virtually endless.

How do I know how much money I can get?

We will help you determine that. The amount you are eligible for depends on the following factors: the ages of the youngest borrower, the value of the home as determined by an appraisal, the current interest rate. Or you may use our handy calculator at REVERSE MORTGAGE CALCULATOR

Is the cash we receive taxable?

No. Reverse mortgages are loans and not considered income.

What happens if my spouse or I need to go to a nursing home?

As long as one homeowner remains in the home, the reverse mortgage does not need to be closed. If the last homeowner needs to go to a nursing home but intends to return, the reverse mortgage doesn’t need to be repaid until that homeowner has been gone for 12 consecutive months.

What happens if we decide to move?

Your home needs to remain your principal place of residence when you have a reverse mortgage. Unless the reverse mortgage was originally taken out on a 2nd home. Several programs allow this. You may leave your home for any reason for up to 12 consecutive months. If you decide to sell your home, you simply repay the reverse mortgage loan balance from the sale proceeds exactly the same as you would with a conventional forward mortgage and keep the remaining cash.

What happens to our home when we pass away?

Your home will transfer to your heirs per your will or estate plan, just like it will now. The outstanding Reverse Mortgage balance must be repaid once your estate is settled. Your heirs may sell the home, pay off the outstanding loan balance and keep the remaining cash, or refinance the outstanding loan balance and keep the home. Your heirs are generally given up to a year to resolve the estate and repay the reverse mortgage. In any case, a reverse mortgage is a “Non Recourse” loan which means that no matter how much you owe at the time the loan is paid off, you or your heirs can never owe more than the value of the home at that time. Of course, if there are proceeds left when the home is sold, that money goes to either you or your heirs. This is a very safe product for both senior homeowners and their families.

What if my children have questions about a reverse mortgage?

We encourage all interested parties to participate in the discussions regarding a reverse mortgage. Your children, after all, only want the best for you and are looking out for your needs. We even sometimes talk to friends, other relatives, spiritual advisors, or anyone who is helping you make this decision. The more informed everyone is, the easier it is to see the many benefits and “safety nets” that are built into the reverse mortgage.

Why don’t I just sell my home?

In some cases, that may be the best answer. We will answer all your questions about a reverse mortgage and then let you decide. One important point to consider is if you sell your home, where will you live? And what costs are associated with the sale? Perhaps the answer is to sell the current property and purchase one that better meets your current needs. We can help you sift through your many options and will even recommend a real estate professional for further guidance if you request. You can also use a Reverse Mortgage to purchase a new home if the funds available from your sale are not enough to pay cash fro the new home.

How do I start the process?

Just call our office at 800-216-6322 and ask to make an appointment. We will come to your home if you like, and discuss all the options available to you. If you prefer, you can email us at reverse@morningstarmortgage.com and request an appointment. We will be available throughout the process to answer any questions and will even attend settlement with you if want us to. We are here to help you and our pledge is to make your reverse mortgage a pleasant experience.

For additional information, please visit our Reverse Mortgage information site at www.62homefree.com