Q. What is a reverse mortgage and what is the best way to learn more about them?
A. A reverse mortgage is a loan that enables senior homeowners, over 61 to convert part of their home equity into tax-free income without having to sell their home, give up title to it, or make monthly mortgage payments. The loan only becomes due when the last borrower permanently leaves the home. Get our Free Guide to learn more (click here).

Q. How is a reverse mortgage like a home equity loan? How is it different?
A. Both a reverse mortgage and a home equity loan use the equity you have built up in your home to provide you with readily available cash. They differ in that with a home equity loan you must make regular monthly payments. However, with a reverse mortgage you are not required to make any monthly mortgage payments for as long as you stay in the home. 

Q. I am a widow and can not afford to take chances. Is a reverse mortgage safe?
A. The federally insured reverse mortgage was designed by HUD to ensure that it was safe and well designed. These reverse mortgages are federally insured and contractually guaranteed. Your security is a high priority for us. See our report of Mistakes to avoid (click here). 

Q. Can my current income influence my ability to get a reverse mortgage?
A. No. Since reverse mortgage borrowers need not make monthly repayments, there are no income or credit qualifications (in fact a reverse may even save a home from foreclosure). 

Q. What are the advantages of a reverse mortgage?
A. There are many. Here are a few of the most significant:

• Remain independent. A reverse mortgage allows you to remain in your home with increased cash flow. 
• Keep title to your home. You are still the owner of your home, and still may pass title of your home to your heirs upon your passing.
• No monthly mortgage payments. You need not pay back the reverse mortgage loan nor make any monthly mortgage payments until you permanently move out of the home. 
• Tax-free money. Because the money you receive from a reverse mortgage is not considered income, it is tax free and will not affect your Social Security or Medicare benefits. 
• Freedom and flexibility. The money you get from a reverse mortgage is yours to use in any way you choose.
• Payoff credit cards and other debts. You may improve your cash flow further by using some of the tax free proceeds to eliminate other monthly debts and payments. 
  

Q. I've heard that with a reverse mortgage the lender would own my home. Is this true?
A. It's absolutely false. The borrower retains title to the property. The reverse mortgage lender is merely extending a loan to the borrower. Because the homeowners retain title and are still the owner of the property, they remain responsible for the payment of property taxes, insurance, utilities, home maintenance, and other expenses - just as they would with a standard first mortgage or home equity loan because it is still their home. 

Q. How can I find out if I qualify or if a reverse will be right for me? 
A. The best way is to speak with one of our trained agents or obtain our Free Guide and work book (click here for you Free Guide).

Q. Can I refinance a reverse mortgage, as I would be able to do with a traditional home mortgage?
A. Yes. There is no prepayment penalty, so you may refinance or sell at any time. In many instances, it may be possible to refinance in later years and obtain more money depending upon the home value, your age, and the other factors in place at that time. 

Q. Can I still make monthly payments on the loan if I want to?
A. Yes, you may. There is no prepayment penalty. 

Q. Is it possible for my loan balance to become greater than the value of my home?
A. The loan has a "limited liability" clause, and specifically says that if the home is sold and the mortgage exceeds the value of the home neither you nor your heirs would be responsible for any short fall. The value of the home is the sole source of repayment for the loan, even if it becomes lower than the mortgage balance. This is a guaranteed part of the contract.

Q. What if the value of the home increases over time and there is much more wealth in the home down the road. Who gets this wealth? 
A. Any increase in home value is yours and you or your estate receives all proceeds above and beyond the loan balance when you sell your home. This also is guaranteed part of the contract.

Q. Can the mortgage lender take my home away if I outlive the loan? 
A. No they cannot. There is no specific term in a reverse mortgage, so the loan continues in place as long as either you or your spouse continue to live in the home as your primary residence and keep the property taxes and homeowners insurance in force as you do now. No matter how long that may be.

Q. Do I risk losing my house by getting a reverse mortgage?
A. Absolutely not. As long as you continue to occupy the home as your primary residence, continue to pay your tax and insurance fees, and maintain the upkeep of your home- under no circumstances relating to a reverse mortgage can you ever lose the home or be forced to leave. In fact, it is a great way to protect a home from foreclosure or other unforeseen circumstances. 

Q. How do you determine the amount of cash I am eligible for?
A. The amount you can borrow depends on several factors, including your age, the type of reverse mortgage you select, current interest rates, the location of your home, and the appraised value of your home and FHA's lending limits for your area. Click here to get our 7 tips to get the most from your reverse mortgage report.

Q. Are there any limits on how I use the money I receive from a reverse mortgage?
A. You can use the money for anything you choose, from daily living expenses, home improvements, healthcare expenses, paying off existing debts, or simply enhancing your retirement years. For many people, the money provides a "financial security blanket," in case unexpected expenses arise.

Q. My house is paid for and my monthly income is good. Why would I want or need a reverse mortgage?
A. There are many reasons senior homeowners get a reverse mortgage, such as: setting up trust accounts, buying insurance or health care services, increasing investment portfolios, remodeling, traveling, or simply to have cash on-hand for quick access. A reverse mortgage is often taken out because the homeowner "wants" the money, rather than out of need. 

Q. Are there any other reasons why I should consider a reverse mortgage now even if we are able to get by on our current cash flow?
A. Yes. Most people forget that when one of them passes away, the other spouse will lose a significant amount of cash flow due to loss of one of the social security incomes (and possibly other pensions and income sources). For this reason, many couples choose to get the reverse mortgage in place now, especially under today's very high temporary limits so that they are assured of having this large source of money in reserve. Our work book will help you preview your income as a widow/widower (click here to view our work book).

Q. Is there a choice in how I receive the cash from my reverse mortgage?
A. Most definitely. With most reverse mortgages you have a wide range of payment options, one of which should be ideal to meet your financial needs. 

• You can choose to receive the money all at once as a lump sum. 
• You can receive equal monthly payments as long as one of the borrowers lives and continues to occupy the property as a principal residence. 
• You can choose to receive equal monthly payments for a fixed period of months. 
• You can obtain a line of credit, which allows you to take funds at times and in amounts of your choosing (and of course you are not charged any interest until you access those funds). 
• Or, finally, you can choose a combination of the above. 
  

Q. Who can qualify for a reverse mortgage?
A. Homeowners over 61 years of age may qualify. There are no income, health or credit qualifications. 

Q. I still owe money on a first or second mortgage. Can I still get a reverse mortgage?
A. Yes. You may be eligible for a reverse mortgage even if you still owe money on a first or second mortgage. The funds you would receive in the reverse mortgage would be used to pay off whatever existing mortgages you have on the property, and any additional funds would be available for you to use in any way that you see fit 

Q. Is there any out-of-pocket cost associated with this loan? 
A. Almost all closing costs for a reverse mortgage are included in the loan. The only money required upfront is for the mandatory HUD counseling (usually no more than $125) and a deposit fee for the appraisal (usually no more than $450).

Q. What is the process for getting a reverse mortgage and how long does it take?
A. There are two counseling steps; the first is with a Home Safe advisor to see if a reverse mortgage would be right for you, and to see if you qualify. A second counseling is required to ensure that you are of sound mind and that you understand how the program works (this one is usually done over the phone and is with an independent HUD approved party). 

Our Home Safe advisor will carefully review your specific circumstances and help determine if a reverse mortgage is right for you. He or she will fully answer all of your questions and suggest a specific course of action to help you accomplish your retirement needs, while you remain safe and secure in your home. 
Next our Home Safe advisor will prepare an application and carefully review and explain each document. 
The second counseling session is usually done over the phone with a HUD-approved counselor who will further review and answer any and all questions you may have regarding the reverse mortgage program. Once completed you will receive a certificate that you completed this phase and we may begin processing your application for approval. It usually takes 3-6 weeks to obtain loan approval, sign the final loan documents and obtain your proceeds. During this process you are not committed, and may cancel with application at any time with no fee. 

Q. Can I obtain a reverse mortgage on a second home or resort property I own?
A. Unfortunately no. Reverse mortgages may only be taken out on your primary residence. 

Q. What kinds of homes are eligible for a reverse mortgage?
A. Most primary residences will qualify, including a single family, 2 to 4 unit property, condominium, town home or manufactured home (if built after June 1976). Co-ops will be available very soon. 

Q. Would a home that is in a "living trust" be eligible for a reverse mortgage?
A. Yes, most living trusts are fine. A review of the trust documents would be made by the reverse mortgage lender to determine if anything in the living trust would be unacceptable. Click here for our report on mistakes to avoid.

Q. Are all reverse mortgages the same?
A. No, actually there are two basic types of reverse mortgages: 
Federally-insured reverse mortgages. Known as Home Equity Conversion Mortgages (HECM), they are insured by the U.S. Department of Housing and Urban Development (HUD). They are widely available, have no income requirements, and can be used for any purpose. 
Proprietary reverse mortgages. These are private loans with unique features that appeal to certain kinds of borrowers, usually larger, more valuable properties. These types of reverse mortgages are backed by the companies that develop them. 

Q. When will I have to pay the principal and interests cost of this loan?
A. Your reverse mortgage loan becomes due and must be paid in full when one or more of the following conditions occurs: (a) the last surviving borrower passes away or sells the home; (b) all borrowers permanently move out of the home; (c) the last surviving borrower fails to live in the home for 12 consecutive months due to physical or mental illness; (d) you fail to pay property taxes or insurance; (e) you let the property deteriorate, beyond what is considered reasonable wear and tear, and do not correct the problems. You usually have up to 1 year to either settle the mortgage in any way you or your heirs prefer.

Q. What has to be repaid when the loan becomes due?
A. The mortgage principal (you amount that you have taken or used), the initial closing costs, and the interest, insurance charges, and service fees for the length of time that you kept the mortgage. This is usually paid from the proceeds when the home is sold, but may also be paid by refinancing or any other means you or your heirs decide.

Q. If I take a reverse mortgage, may I still leave my home to my heirs?
A. Yes, it is your home and you may leave it to who ever you wish. Any remaining equity belongs to you or your heirs. It's important to remember that you can never owe more than the home's appraised value when it is sold. None of your other assets will be affected by your reverse mortgage loan. 

Q. Must the heir or the last surviving borrower sell the property to repay the reverse mortgage loan?
A. No. Repayment may be accomplished by refinancing the reverse mortgage with a traditional "forward" mortgage loan, or through the use of other assets.

Q. Are reverse mortgage interest rates fixed or variable?
A. We have both fixed and variable reverse mortgage available. Each of these programs may have beneficial options for you. Your Home Safe agent will help you determine which one will benefit you most. 

Q. What are the tax consequences of a reverse mortgage? 
A. The money received from a reverse mortgage is not considered to be income by IRS and therefore is non taxable (always check with your tax professional regarding tax advise). 

Q. If I take on a reverse mortgage, how will it affect my government benefits?
A. The funds from a reverse mortgage do not affect regular Social Security or Medicare benefits. 
If you receive SSI, Medicaid, or other public assistance, you will want to structure and use your reverse mortgage in a very specific manner so that you remain within the qualifying parameters of these programs so that you may also continue to receive all of the benefits you may be entitled to with these programs as well. Be sure to speak with our highly trained Home Safe advisors for advice on using your reverse mortgage and continuing to remain qualified for the any other government assistance programs.

Because of the recent decrease in fees and the 2009 Obama Stimulus package which increased the amount of money available under the Federally insured reverse mortgage, and because rates are at all time lows, there has never been a better time to obtain a reverse mortgage than now. Please note, that the 2009 Stimulus package temporarily increased the FHA limit dramatically until the end of 2011. At the end of 2010 the limit will be decreased and many home owners will receive quite a bit less after 2010, so it is to your advantage to act immediately.

Please call to speak with a Home Safe agent to find out how much you may receive and to discuss the best way to structure a reverse mortgage for you. Toll free (866) 897-0839 or (949) 440-2000