2) Will I still have an estate that I can leave to my heirs?

3) Can a reverse mortgage be taken out if there's already a conventional mortgage on the home?

4) What types of homes won't qualify for a reverse mortgage?

5) What about a home in a "living trust"?

6) Will I have any tax liabilty for the reverse mortgage proceeds?

7) How do the monies from a reverse mortgage affect Social Security, Medicare or pension benefits?

8) If I take out a reverse mortgage will my SSI or Medicare benefits be affected?

9) What are the upfront costs associated with a reverse mortgage?

10) What is due when the loan is repaid?

11) What if I owe more than my home is worth?

12) Does the lender take the house?

13) If there are no payments, what are my responsibilities as a borrower with a reverse mortgage?

14) When does the loan become due and payable?

15) Do I or my heirs have to sell the property to repay the loan?

16) Can a lender take my home away if I outlive my loan?

1) Who are reverse mortgages designed for?
They are designed for homeowners at least 62 years of age with significant equity in their homes.

2) Will I still have an estate that I can leave to my heirs?
When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you recieved from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home belongs to you or to your heirs. None of your other assets will be affected by HUD's reverse mortgage loan. This debt will never be passed along to the estate or heirs.

3) Can a reverse mortgage be taken out if there's already a conventional mortgage on the home?
Yes, but any existing mortgages must be paid off at closing. The proceeds from the reverse mortgage may be used for that purpose.

4) What types of homes won't qualify for a reverse mortgage?
Generally vacation homes or secondary residences, moblie or manufactured homes not attached to a permanent foundation, rental properties of more than four units and homes on leased lands do not qualify.

5) What about a home in a "living trust"?
A homeowner who has put the home in a living trust can usually take out a reverse mortgage, subject to review of the trust documents.

6) Will I have any tax liabilty for the reverse mortgage proceeds?
Currently, the Internal Revenue Service treats monies from a reverse mortgage to be loan advances and not a taxable income. For your specific situation, we recommend that you consult your tax advisor.

7) How do the monies from a reverse mortgage affect Social Security, Medicare or pension benefits?
The proceeds from a reverse mortgage do not affect these benefits. For your specific situation, we recommend that you consult your financial advisor.

8) If I take out a reverse mortgage will my SSI or Medicare benefits be affected?
No, a reverse mortgage will not affect these or most other means tested benefits as long as the monthly cash advances are fully spent every month and not accumulated. Programs do vary by state so it's advisable to check with the local Are Agency on Aging. We also recommend that you consult your financial advisor.

9) What are the upfront costs associated with a reverse mortgage?
The borrower will pay an origination fee and actual closing costs, including charges by the title and escrow companies. All of these costs can be financed as part of the initial loan advance.

10) What is due when the loan is repaid?
The borrower pays back the cash advances they have received plus accumulated interest.

11) What if I owe more than my home is worth?
All reverse mortgages are "non-recourse" loans, which mean that the borrower can never owe more than the value of the home regardless of loan balance.

12) Does the lender take the house?
This is a misconception; a reverse mortgage is merely a loan against the property. The title remains in the name of the borrower and the lender is only repaid the loan balance or the home value which ever is less.

13) If there are no payments, what are my responsibilities as a borrower with a reverse mortgage?
Your required to pay your property taxes, keep current property insurance in place, maintain the home, and notify the lender if you will be away from the property for an extended period.

14) When does the loan become due and payable?
The loan is due and payable when the borrower sells the property, permenently leaves the home, or passes away. In the case of a couple, it is the second to move out or die that triggers the repayment. Until these events take place you live in the home and make no payments to the lender.

15) Do I or my heirs have to sell the property to repay the loan?
No, repayment can be accomplished by refinancing of the existing reverse mortgage by a conventional mortgage loan.

16) Can a lender take my home away if I outlive my loan?
No. Nor is the loan due. You do not need to repay the loan as long as you or one of the borrowers continues to live in the house an keeps the taxes and insurance current. You can never owe more than your home's value.