Faqs
Reverse Mortgage FAQs
How does a reverse mortgage work?
A reverse mortgage allows eligible homeowners age 62 and older to convert a portion of their home equity into available funds. Depending on the borrower’s age, home value, existing mortgage balance, and loan terms, the proceeds may be used to pay off an existing mortgage, establish a line of credit, receive monthly payments, or access funds in another approved way.
Unlike a traditional mortgage, there is generally no required monthly principal-and-interest mortgage payment as long as the borrower continues to meet the loan obligations.
How long does it take for a reverse mortgage to close?
In many cases, a reverse mortgage may take about 30 to 45 days to close, although timing can vary depending on the property, appraisal, counseling, underwriting, and other transaction details.
Do I have to repay a reverse mortgage?
A reverse mortgage does not usually require monthly principal-and-interest mortgage payments while the borrower continues to live in the home as a primary residence and meets the loan obligations.
The loan generally becomes due when the home is sold, the last borrower permanently leaves the home, or the loan obligations are no longer being met.
Can I choose to make payments on a reverse mortgage?
Yes. Borrowers may choose to make voluntary payments toward the loan balance, although they are generally not required to make monthly principal-and-interest mortgage payments. Some homeowners choose to do this to manage how the loan balance changes over time.
Do I still own my home after getting a reverse mortgage?
Yes. With a reverse mortgage, the borrower remains on title and continues to own the home, provided the loan requirements are being met.
Can the lender take my home?
A reverse mortgage can be used to pay off an existing mortgage, which may eliminate the borrower’s required monthly principal-and-interest mortgage payment. However, the borrower must still continue to pay property taxes, homeowners insurance, and any other required property-related charges.
How much money can I receive from a reverse mortgage?
The amount available varies based on factors such as the age of the youngest borrower, the home’s value, current interest rates, the type of reverse mortgage, and any existing mortgage balance that must be paid off.
Some borrowers use the proceeds primarily to pay off an existing mortgage, while others may have additional funds available through a line of credit, monthly payments, lump sum, or a combination of options. See our convenient Payout Calculator page.
What payment options are available?
Depending on the loan type and borrower qualifications, reverse mortgage proceeds may be available in several ways, including:
- A line of credit
- Lump-sum funds
- Monthly payments
- A combination of these options
The best choice depends on the borrower’s financial goals and overall situation.
How much does a reverse mortgage cost?
A full review of estimated costs should always be part of the loan comparison process before moving forward.
Are there restrictions on how I use the money from a reverse mortgage?
In many cases, reverse mortgage proceeds may be used for a wide range of purposes, depending on the borrower’s needs. Common uses include paying off an existing mortgage, supporting retirement cash flow, covering medical or care-related expenses, funding home improvements, or creating additional financial flexibility.
How old do I need to be to qualify for a reverse mortgage?
For a standard HECM reverse mortgage, the borrower must generally be age 62 or older. In some situations, there may be additional considerations involving a spouse or eligible non-borrowing spouse, depending on the loan structure.
What is equity?
Equity is the difference between the current value of the home and the amount still owed on any existing mortgages or liens. For example, if a home is worth $500,000 and the mortgage balance is $200,000, the homeowner has $300,000 in equity.