Frequently Asked Questions About Reverse Mortgages
What is a Reverse Mortgage?
A reverse mortgage is a loan that enables homeowners who are at least 62 years old to convert some of their home equity into cash, or to finance a home purchase with the freedom of no monthly mortgage payments. The borrowers cotninue to live in and own their home. Unlike a traditional home equity loan or home equity line of credit, a reverse mortgage doesn't have to be repaid until the last surviving borrower no longer lives in the home, or the home is sold* The homeowners remain responsibile for keeping current with property taxes and hazard insurance, and maintaining the condition of the home.
Am I Eligible?
To be eligible for a reverse mortgage:
All titleholders must be age 62 or older.
The home must be the borrowers' primary residence, and must meet Federal Housing Authority (FHA) minimum property standards.
You Must have sufficient home equity. A Reverse Mortgage Specialist from RTC Mortgage can tell you if you have enough home equity to qualify.
Will the Bank Own My House?
No. Just like a traditional mortgage, as long as the terms of the loan are met, the borrowers retain full homeownership and can sell the home at any time.
How Much Money Can I Get?
This is determined by the age of the youngest borrower, your home value, the amount of equity, FHA lending limits, the current interest rate, and the reverse mortgage product and payment option you choose. RTC Mortgage can provide you with a quote that's tailored to your specific situation, with not cost or obligation.
How Do I Receive My Proceeds?
You can take your funds as a lump sum; monthly payments for a specified period, or for as long as you live in the home; a line of credit; or a combination of these.
Am I Spending My Children's Inheritance?
A reverse mortgage may help you plan for a more comfortable retirement, lived with greater financial independence. We encorage ou to involve family members in your decision process-so you can make the choice that's right for you. When the home is sold or is no longer your primary residence, the loan must be repaid. Any remaining equity belongs to you or your estate, and can be transferred to heirs.
What Are The Costs Associated With A Reverse Mortgage?
In addition to interest, the costs can include a property appraisal fee, orgination fee, closing costs, mortgage insurance premium, servicing fee and a modest charge for HECM counseling. While closing costs vary based upon the type and size of the loan, they're the same as those for any traditional mortgage. You can roll most of the up-front costs into the loan, so out-of-pocket expense can be minimized. A RTC Mortgage Reverse Mortgage Consultant will be pleased to give you a detailed cost breakdown.