Reverse Mortgage Information - Who Qualifies For Reverse Mortgages

Reverse mortgages can be an ideal solution for seniors who want to stay in their homes but struggle with monthly payments and financial obligations. If you're over 62 and own your home, a reverse mortgage allows you to receive payments from the bank, rather than making payments to it. However, it's crucial to gather comprehensive information before committing to this type of loan.

Eligibility and Requirements

• Eligibility: Available to homeowners over 62, regardless of income. Your home must be a single-family residence, a condominium, or a manufactured home, but not a cooperative or most mobile homes. The home must be at least one year old, and you must meet with an authorized counsellor.

Loan Options and Usage

• Loan Disbursement: You can receive the loan as a lump sum, a fixed monthly payment, or a line of credit. The funds can be used for various purposes, such as paying property taxes, medical bills, home repairs, or daily expenses.

• Repayment: The loan does not need to be repaid until you sell the home, move out permanently, or pass away. It may also become due if the property deteriorates, property taxes or insurance are not paid, or if the last surviving borrower does not occupy the home for 12 months due to illness.

Fees and Costs

• Origination Fees: Cover lender's operating expenses, capped at the greater of $2,000 or 2% of the maximum FHA loan limit.

• Mortgage Insurance: Required to protect the lender.

• Appraisal Fee: Typically $300 - $400.

• Other Costs: Include fees for credit reports, flood certification, title searches, document preparation, recording, courier services, pest inspections, and land surveys. A monthly service fee of $30-35 is also charged.

Meeting with a counsellor will provide you with all the necessary reverse mortgage information to make an informed decision. This option can help you remain in your home while managing your financial needs.