Types of Reverse Mortgages

1. Single-purpose reverse mortgages, which are offered by some state and local government agencies and nonprofit organizations.
2. Federally-insured reverse mortgages, which are known as Home Equity Conversion Mortgages (HECMs) and are backed by the U. S. Department of Housing and Urban Development (HUD).
3. Proprietary reverse mortgages, which are private loans that are backed by the companies that develop them.

For more information on Reverse Mortgages, visit:

• National Reverse Mortgage Lenders Association
• AARP
• U.S. Department of Housing and Urban Development
• Federal Trade Commission

Reverse Mortgage

What do I have to do to quality for a reverse mortgage?

To be eligible, you must own your home and be at least 62 years of age. You don't need to have existing income to qualify, and on many types of reverse mortgages, there are no health or credit qualifications.

Are there any restrictions on how I spend the money?

Senior homeowners are not restricted in any way in how they use the proceeds from a Reverse Mortgage. Some of the ways they are being used are:

• To pay off existing mortgage
• Eliminate credit card debt
• Fund a long-term care insurance policy
• Pay for home health expenses
• Enhancing monthly retirement income

Will I owe taxes on the money I receive from a reverse mortgage?

The proceeds of a reverse mortgage are generally tax-free, and many reverse mortgages have no income restrictions. This income will also not affect your Social Security or Medicare benefits. The loan must be repaid when the last surviving borrower dies, sells the home, or no longer lives in the home as a principal residence.

Who retains title to the house?

You do. A reverse mortgage simply allows you to use some of the equity you've built up in your home, tax-free. However, because you retain title, you are responsible for property taxes, insurance, utilities, maintenance, and other expenses. Also, interest on reverse mortgages is not deductible on income tax returns until the loan is paid off in part or whole.

Is a reverse mortgage insured?

In most cases, the answer is yes. However, different government agencies or private companies insure different types of reverse mortgages.

This sounds too good to be true. How do the lenders make their money?

Lenders generally charge origination fees and other closing costs. Lenders also may charge servicing fees while the mortgage is in effect. The lender generally sets these fees and costs.

To find out more on how a reverse mortgage may help improve your quality of life, call us at 859-224-0764 or email us.