Reverse Mortgages: Potential Income for Older Americans

Reverse mortgages have become very popular in recent years as a source of income for older Americans. The lender pays you the money either in a lump sum, in monthly installments, or as a line-of-credit. A reverse mortgage is a loan secured by home equity that doesn’t need to be repaid until the end of the loan term, which is usually when the homeowner no longer occupies the home as a principal residence, sells the home, or dies.

According to federal regulations, if you apply for a reverse mortgage loan you must receive counseling from a state-certified housing counselor who will help you understand the implications of your choice. There is no charge for this service.

Call us at 888-662-8551 or use the form below for a list of Certified Reverse Mortgage Counselors.

If you obtain a reverse mortgage, you remain responsible for maintenance, insurance and taxes for the home during the loan period. You can use the money from the reverse mortgage however you choose. You cannot be forced to sell or vacate the home if the money received from the loan exceeds the value of the home. In addition, should you die and your spouse is a co-borrower, he or she cannot be forced to sell the house as long as he or she occupies the home as a principal residence.

When the borrower (and any co-borrower) dies, the loan balance plus accrued interest becomes due and payable. Your heirs may repay the loan and keep the home, or sell the home, repay the loan and keep the balance. If the loan exceeds the property value, your heirs will owe no more than the property value, and no additional financial claims can be made against them or the estate.

To qualify for a reverse mortgage, you and any co-borrower must be at least 62 years old, must own your home free and clear (or have a very low outstanding debt), and must occupy the home as your principal residence.

Click here to view the online Reverse Mortgage presentation (PowerPoint, 607k).

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