Reverse Mortgage Details
There are currently no income, employment, or credit requirements! This is changing in the near future, and will make it much harder to qualify. If this is a concern, call 1-800-431-9250 for the latest information on these changes.
- All homeowners must be at least 62 years of age and occupy the property as their primary residence.
- The home can have an outstanding mortgage (it will be paid off).
- Houses, town homes, condominium units, and some mobile homes and PUD's are eligible.
- The home must meet minimum HUD property standards. If not, sometimes repairs can be made after the closing of the reverse mortgage.
How much can be borrowed?
The more your home is worth and the older you are, the more you'll be able to borrow. The current maximum loan limit is $625,500. This limit was just increased as part of the latest government stimulus package, and is in place until the end of 2013, after that (as long as it is not extended) it will drop back to $417,000. You can instantly see how much you qualify for with the calculator to the left.Loan amounts are based on:
- Age of the youngest homeowner
- Appraised value of the home
- Current interest rate
- Type of reverse mortgage you choose. (Traditional, Saver program)
Cash Disbursement Options
With a fixed rate reverse mortgage you are required to take the disbursement as a lump sum, but with the adjustable rate reverse you can choose to receive any combination of these options:Lump Sum
- Cash is available immediately
- Equal monthly payments for a fixed number of months
Line of Credit
- A credit line that you can draw upon whenever you wish.
Interest rates on adjustable rate reverse mortgages are low and are generally comparable to traditional mortgage rates. Rates are set based on the one-year US Treasure Bond Rate. You can choose to have the rate adjusted monthly or annually. Changes to your rate will have no effect on how much cash is available to you; instead fluctuations in rates cause the loan balance to grow at a slower or faster rate.
The rates on fixed reverse mortgages have dropped substantially over the past few years making this an increasingly popular option. They are still slightly higher than conventional mortgage rates, but many seniors like the security that comes with having a fixed rate.
Whether you choose a fixed or adjustable rate, we are confident you will be happy with your reverse mortgage. Feel free to use the calculator on this site to estimate how much you qualify for.
The loan is due when the last borrower no longer occupies the property as the principle residence. At this point, the loan may be repaid either by sale of the home or through other resources (such as savings, life insurance, or applying for a new traditional mortgage).
If your heirs choose to sell the home, they will keep the remainder of the equity from the sale after the loan has been repaid. Your estate has up to 12 months to repay the loan. This means your heirs can take their time to get the best sales price.