The Right Questions about Reverse Mortgages

You may be like most consumers. You’ve heard about Reverse Mortgages but are unsure and want more information.

Your situation may be the right fit for a Reverse Mortgage so it is important you take the time to learn more. What questions do you ask? Here is a guide to some smart and basic questions and answers that will provide you a good overview of the Reverse Mortgage program.

What is a Reverse Mortgage
A Reverse Mortgage is a special type of loan that allows a homeowner to convert a portion of the equity in their home to eliminate mortgage payments and even gain tax-free income without losing the title to the home. The accumulated equity derived from mortgage payments and appreciation can be paid to the borrower. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer uses the home as the principal residence.

How do you qualify?
Borrowers must be 62 or older and own a home with some equity. You don't need any income to qualify. If you currently have a mortgage, that's okay -- you pay it off with a Reverse Mortgage. You can even have bad credit, as long as there are no current government liens against your home.

How can you use the money?
The money from a Reverse Mortgage can be used for any purpose, from making ends meet to living retirement dreams. The top reasons for funds used given typically by borrowers are:

• Paying off debts, primarily mortgage and credit cards
• Home repairs and remodeling
• Living expenses
• Travel
• Health care or long-term care
• Easing the financial burden on children
• Education
• Hobbies

Will you lose your home?
Absolutely not. You remain the homeowner and you can stay in your home for as long as you pay the taxes, insurance, and maintain proper upkeep of the home. In effect, you are being paid to live at home. The program is regulated and insured by the Federal Housing Administration. By law, you can't be forced to sell or move. And no payments are due on the Reverse Mortgage until you no longer live in your home.

If no monthly payments are required, how is the Reverse Mortgage paid back?
This isn't a home equity loan. The loan is paid back when you move out of the home, sell it or all the people on the title have passed away.

What if you want to leave the home to your kids?
It's your home. You can still leave it to your children or to anyone you choose. Your heirs can pay off the loan any number of ways, such as selling the home, refinancing the debt or using other funds to pay off the Reverse Mortgage.

How much cash can you get?
The amount depends on your date of birth, value of your home and lending limits in your area.

What are the costs?
As with any loan, there are closing and other costs, all of which can be paid with the money generated by the Reverse Mortgage, but there are typically NO out-of-pocket costs to the homeowner.

Will this loan affect your Social Security or Medicare benefits?
HECM payments do not affect Social Security or Medicare benefits because those benefits are not based on the assets of the recipient. However, in the federal Supplemental Security Income program, beneficiaries must keep their liquid resources under certain limits.

This is only just the beginning. If you want to explore further, you should schedule a consultation with a knowledgeable and experienced Reverse Mortgage advisor. You are encouraged to consult with family or a financial advisor too. If you have further questions, you are welcome to contact us at reversemortgage@apmortgage.com or call (888) 434-2738.