Answers by Sharon Johnson, Reverse Mortgage Specialist at Northwestern Bank in Dilworth
What is a reverse mortgage loan?
Reverse mortgage is a borrowing option available to homeowners 62 and up that allows you to use the equity in your home for cash to cover a variety of expenses. With reverse mortgage, instead of making monthly payments, the loan balance is repaid in one lump sum once you sell or permanently leave your home. You continue to own and live in your home and remain responsible for payment of property taxes, homeowners insurance, and keeping the home maintained.
Are some reverse mortgages better than others?
Yes, but look for reverse mortgages that are HUD approved. You will have to meet with a counselor from HUD to discuss the Home Equity Conversion Mortgage (HECM).
What are the benefits?
This is an effective way for seniors to supplement expenses or prepare for unexpected costs. The cash proceeds from a reverse mortgage loan can be used for any reason. Many borrowers use it to supplement their retirement income, delay receiving social security benefits, pay off debt, pay for medical expenses, remodel their home or help adult children. Reputably financed HECM’s can be extremely helpful debt instruments for seniors looking for a way to enjoy their sunset years while still allowing them to remain in their homes.
How do I qualify for a reverse mortgage loan?
Must be 62 years or older. Must be living in the home as the primary residence; vacation homes and investment properties do not qualify. Must complete a HUD-approved counseling session. Must be able to pay property taxes, homeowners insurance and any applicable HOA fees.
What if I have an existing mortgage?
Many borrowers use the reverse mortgage loan to pay off an existing mortgage and eliminate monthly mortgage payments.
What are my obligations?
You will be responsible for paying property taxes, homeowner’s insurance, HOA fees and maintaining the home.
Can I still go to Arizona (or live elsewhere) in the winter and do a reverse mortgage?
Yes, as long as the home with a reverse mortgage is considered your primary residence.
Will I still own my home or will I lose it?
You will retain the title and ownership during the life of the loan, and you can sell it at any time.
How can I learn more about a reverse mortgage and see if I qualify?
The best way is to meet with a Reverse Mortgage Specialist like Sharon Johnson from Northwestern Bank in Dilworth, Member FDIC & Equal Housing Lender, NMLS#402088.
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