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What is a Reverse Mortgage?

What is a Reverse Mortgage?

What is a reverse mortgage?

Check if you’re eligible for a reverse mortgage loan.

A reverse mortgage is a home-secured loan that can turn part of the equity you’ve built up in your house into funds you can use today, or a line of credit that will be there when you need it.

It offers homeowners age 62 and older the benefits of a traditional home equity line of credit (HELOC) but with additional benefits — including a flexible repayment feature. With the flexible payment option, you decide how much or how little to pay each month toward principal and interest. Or you can choose to make no monthly loan payment at all.

Just like any mortgage or home equity loan, you continue to own your home, with your name on the title. As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance and maintenance.

At a minimum, to be eligible you must be 62 years of age or older; you must have a certain percentage of equity in the home; and the house must be your principal residence.

 

Check Eligibility




A REVERSE MORTGAGE LETS YOU STAY IN CONTROL


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Customizable

You choose how to receive your funds, either as a lump sum, line of credit, monthly advances or any combination of these.*

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Flexible

You decide how much or how little to pay each month toward principal and interest. Or you can choose to make no monthly loan payment at all. As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance, and maintenance.

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Controllable

With no pre-defined loan maturity date, you can pay down the loan at any time, or defer repayment.


*Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable rate mortgages.




Choose the type of loan that’s right for you

Borrowers have choices when it comes to converting home equity into funds, and the differences between types of loans can be subtle. Here’s a quick comparison chart to help you determine which approach is right for you.



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How much can you receive from a reverse mortgage?

The amount that is available generally depends on four factors: your age, the current interest rate, the appraised value of the home, and government-imposed lending limits. As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance, and maintenance.


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Reverse mortgages have some powerful advantages

A reverse mortgage has certain advantages over other types of home equity-based loans. If the loan balance ever exceeds the value of your home, you and your heirs are not responsible for paying the difference as long as you satisfy your loan obligations, which include maintaining your home, paying your real estate taxes, and property insurance.


Establish a rainy-day fund

Supplement your income

Refinance an existing mortgage

Repay a home equity loan

Consolidate high-interest rate credit card debt

Be more financially prepared

Pay for healthcare

Cover in-home care costs

Make or pay off a major purchase

Home improvements

Home modifications

Buy a home

Why choose RMF

By applying fresh and progressive thinking, we’re delivering a full range of flexible reverse mortgage options, with rates and fees that may be lower than you expect. It’s all about giving you more choices that better fit your needs.

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DIANE S.
Benicia, CA

I just so happen to have a reverse mortgage. The best thing I ever did in my life.

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JAMES J.
Philadelphia, PA

You get to stay in the house and that’s a really good thing. Especially since you still own the house.2

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RICK M.
Fairport, NY

It’s a mortgage or a line of credit, but with flexibility. I haven’t heard a reason why I shouldn’t pick this product.


*Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable rate mortgages.
Not applicable in all states; some states may impose a higher age requirement.
Not applicable in all states; MA imposes a maximum loan amount of $1.5MM. Visit www.reversefunding.com/equity-elite for details.
As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance and maintenance.
||This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency.

Equity Elite® Reverse Mortgage (“Equity Elite®”) is Reverse Mortgage Funding LLC’s proprietary loan program, and it is not affiliated with the Home Equity Conversion Mortgage (HECM) loan program, which is insured by FHA. Equity Elite ® is available to qualified borrowers who also may be eligible for FHA’s HECM program or are seeking loan proceeds that are higher than FHA’s HECM program limit. Equity Elite ® currently is available only for eligible properties in select states. Please contact your loan originator to see if it is currently available in your state.

Upon a maturity event, any non-borrowing individuals with an ownership interest in the property, including non-borrowing spouses, will have a short period of time (for example, 30 days from a due and payable letter or an alternate time specified by the loan servicer if extensions are available under the circumstances) to purchase the property from the estate or, if the non-borrower inherits the property, pay the loan in full using any sources of funds available to them. Any non-borrowing individual, including a non-borrowing spouse, should have a plan to pay off an Equity Elite ® reverse mortgage upon the borrower's death or any other maturity event. If the non-borrower is unwilling or unable to purchase the property or pay the loan in full, there is no protection for the non-borrower (including a non-borrower spouse) to maintain an interest in the home or to continue residing in the home past the maturity event and the non-borrower may be evicted upon foreclosure. The FHA HECM program has protections in place for certain non-borrowing parties, so a reverse mortgage applicant with certain non-borrowing parties should strongly consider an FHA-insured HECM loan (see HECM guidelines or ask an RMF representative for details). Under the Equity Elite ® reverse mortgage loan program, a maturity and/or default event occurs when the last surviving borrower no longer lives in the home as his or her primary residence for at least 12 months, the property charges (including taxes, insurance, or any other property charges) are not paid, required repairs are not completed or the property is not maintained, or any other maturity and/or default event, as specified in the Security Instrument, occurs.