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Frequently Asked Questions
What is a Reverse Mortgage?
A. A reverse mortgage allows homeowners age 62 or older to convert a portion of the equity they have built up over time into tax-free cash–without having to sell their home, give up title to it, or make monthly payments. They can receive these funds either in the form of a lump sum, monthly payment, or line of credit. Unlike a traditional home loan, a reverse mortgage has no monthly payments -- no repayment is required until the home is sold or when it is no longer used as a principal residence by anyone on the loan. When the home is sold, the lender recovers its principal plus interest. The remaining equity in the house goes to the homeowners or their heirs (the heirs to the estate have the right to pay off the loan and assume ownership of the house). The United States Department of Housing and Urban Development (HUD) regulates most reverse mortgages, and they are FHA insured as well.
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