FAQ: Comprehensive Reverse Mortgage Information
Getting the right reverse mortgage information is essential in making a decision whether to take advantage of this benefit or not. Here are some commonly asked questions about reverse mortgages and the answers to these questions. To learn more reverse mortgage information and to find out if a reverse mortgage is right for you, contact the reverse mortgage experts at Advantage Home Loans Corporation for a free consultation.
Important Reverse Mortgage Information
Does the bank own my home if I take a reverse mortgage loan?
One piece of reverse mortgage information that it important to understand is that you retain ownership of your home even after taking a reverse mortgage. The lending bank does not have any power to force you out of your home or to force you to sell unless you violate specific terms of the loan agreement.
What if the loan amount ends up more than the value of my home?
You are not liable for the difference between your house’s resale value and your reverse mortgage. Reverse mortgages are non-recourse loans. This means that the lender can only collect whatever the selling price of the house is when sold, regardless of the amount you received for your loan. You should be wary of any reverse mortgage information from any lender saying that you are liable for the difference.
How does a reverse mortgage work?
As one of your most important assets, a house usually has a certain amount of equity attached to it. With a reverse mortgage, you can collect on this equity to fund or supplement your retirement while eliminating monthly mortgage payments. There are no monthly payments required to pay off your reverse mortgage loan. Instead, the value of the house itself will be used to repay the debt once it is sold.
- You must be 62 years or older;
- You are the owner of your home; and
- Your home is your primary residence.
Will a reverse mortgage affect my Social Security, Medicare, or pension benefits?
Among the reverse mortgage information that is often misunderstood is the effect of a reverse mortgage on work-related and government benefits. You will continue to enjoy your Medicare, Social Security, or pension benefits even if you take advantage of a reverse mortgage. If anything, this loan will help enhance your financial stability because it provides another stream of income that you can use for various purposes. Additionally, reverse mortgages can also allow you to delay collecting Social Security, which means you may receive more from these benefits when you do collect.
The only benefits that may be affected with a reverse mortgage include income-based benefits such as Medicaid.
How can I receive my reverse mortgage funds?
There are a number of ways of receiving your reverse mortgage funds:
- Partial or full lump sum
- Credit line
- Monthly payment (can be modified tenure or tenure plan)
- Combination of the above
What determines the amount of money that I will receive?
How much can be received is one piece of reverse mortgage information that everyone is curious about. The amount that you can collect from a reverse mortgage is determined by your age (the older you are, the higher the value), the equity of your home based on appraised value, current reverse mortgage rates, and your outstanding mortgage balance.
Is there a possibility of losing my home with reverse mortgage?
Generally, the answer is no. However, you do always need to fulfill these three simple requirements so that your reverse mortgage loan does not come due early:
- Pay your homeowner’s insurance
- Pay your property tax
- Keep your house fully maintained at all times
Contact Us for More Reverse Mortgage Information
While the answers above provide some of the most basic and important reverse mortgage information, if there is a specific question you do not see an answer for or would like more information on reverse mortgages, feel free to get in touch! Our reverse mortgage experts will provide all of the information you need to make an informed decision on whether or not a reverse mortgage is the right choice for your financial future.