Frequently Asked Questions

My house is in a trust—can I still do a reverse mortgage?

What happens if I owe more on my home than it is worth?

What happens if my house is worth more than what I owe?

What happens to my house and my heirs or estate when I no longer live in my home?

My house needs repairs—can I still do a reverse mortgage?

What happens if I sell my house?

Are there any restrictions on what I can do with my money?

Can I lose my home?

How long does it take to obtain a reverse mortgage?

What if I already have a mortgage?

Am I required to make any payments during the term of the reverse mortgage?

How much will be owed when the reverse mortgage comes due?

How much does a reverse mortgage cost and what are the fees?

---

My house is in a trust—can I still do a reverse mortgage?

Yes, provided your trust was set-up as a revocable trust. You are able to leave your home in the name of the trust and take out a reverse mortgage.

What happens if I owe more on my home than it is worth?

One of the unique features of a reverse mortgage is that you can NEVER owe more than what your home is worth when the loan is repaid. A portion of your closing costs is used to buy federally backed insurance to protect you and your heirs from ever owing more that what your home is worth.

What happens if my house is worth more than what I owe?

At the time of sale the reverse mortgage balance is paid off and you or your heirs receive the remaining cash.

What happens to my house and my heirs or estate when I no longer live in my home?

Repayment of your reverse mortgage is required either through the sale of the home or a refinance.

My house needs repairs—can I still do a reverse mortgage?

Yes, but depending on the extent of the repairs there may be money held in an escrow account to pay for the repairs when they are completed.

What happens if I sell my house?

The reverse mortgage is repaid and the remaining proceeds are disbursed to the homeowners.

Are there any restrictions on what I can do with my money?

No. It is your money to use as you wish.

Can I lose my home?

No. When you obtain a reverse mortgage you continue to own your home. There are no required monthly payments to make.

How long does it take to obtain a reverse mortgage?

Once your mandatory HUD counseling has been completed, it typically will take about thirty days.

What if I already have a mortgage?

The proceeds of the reverse mortgage will pay off the current mortgage and you will receive any remaining cash.

Am I required to make any payments during the term of the reverse mortgage?

No. The flow of payments is reversed during the term of the reverse mortgage—the lending institution pays you. However, you are responsible for keeping up payments for your homeowner's insurance and property taxes.

How much will be owed when the reverse mortgage comes due?

The amount owed is typically the amount borrowed plus the accrued interest.

How much does a reverse mortgage cost and what are the fees?

Many of the traditional costs associated with a “forward” mortgage will also be paid for a reverse mortgage. You can expect to pay an origination fee, mortgage insurance premium (with the FHA HECM), and third party fees including appraisal fee, title insurance, survey if applicable, insurance, government recording fees, local and state taxes, etc.