Fast Facts on Reverse Mortgages
A Home Equity Conversion Mortgage (HECM) is a type of reverse mortgage. A HECM is federally insured by the Department of Housing and Urban Development. There are other types of reverse mortgages, but the HECM is the most widely used. You need to be counseled by a HUD certified reverse mortgage counselor before you proceed. Certain states have specific requirements and if you are pondering a reverse mortgage and reside in Minnesota, you must have counseling by an agency that is physically located in Minnesota, such as Reverse Mortgage Counselors, Incorporated. For more information call 651-368-8516.
- All borrowers must be 62 years or older. If it’s you and your spouse, it is based on the youngest person’s age.
- Qualification for a reverse mortgage is based on the value of your property.
- A reverse mortgage is different from a home equity loan because you make no payment until you leave the house or transfer title.
- How much you receive depends on your age, your home’s equity, and the interest rate.
- You or your heirs will never owe more than the value of your home.
- When the loan is due, you or your heirs can repay the loan and keep the house or sell the house and repay the loan.
- There is no income qualification; but you must be able to pay your taxes and insurance.
- You can withdraw your equity in several ways.
- You own your home— the lender does not take control of the title. You continue to maintain the house and pay property taxes.
- Closing costs and most fees can be financed as part of the loan.
- It is a loan and not considered part of your income; it will not affect your Social Security benefits or Medicare.
- If you are receiving public benefits you can you can still get a reverse mortgage.
- If you have poor credit you can get a reverse mortgage.
- If the house needs repairs, funds may be withheld to repair the house.