- How do I qualify for a reverse mortgage?
- You must be at least 62 years of age, own, and have equity in your home and it must be your primary residence. There are no income, credit or health requirements to qualify.
- Who will own my home after I get a reverse mortgage? Who has title to the property?
- You will continue to own and have title to your home just as with a regular mortgage. The reverse mortgage recipient has title & ownership to the home, not the lender. It's a common mistake (and it's a big one) to think you are selling your house to the lender - you are not. Also, and just as important to know, the lender does not "own" the house when the recipient dies.
- How will the income from the reverse affect my taxes, social security or other benefits?
- Proceeds from a reverse mortgage are not taxable, it's your money (equity), not taxable income. Nor will your regular Social Security or Medicare be affected. The impact, if any, on other federal, state or local assistance programs should be discussed with your financial advisor or the program sponsor.
- What if I already have a mortgage or other debt on my home?
- The mortgage and or debt will be paid off from the proceeds of the reverse mortgage funding. Your reverse mortgage will then be based upon the remaining equity in your home.
- How much money can I receive?
- This depends upon recipient’s age, market value and equity in the home and the interest rate at the time of origination.
- Are there options on how much I can receive at a time?
- Yes. You can choose to receive fixed monthly payments for as long as the home is your primary residence or, a lump sum payment, a line of credit or any combination of the above.
- Do I still pay property taxes and insurance?
- Yes! You still have to pay property taxes and maintain your homeowner’s insurance.
- If I choose to receive the regular monthly payments, will the reverse stop paying me once I have reached a certain age or once I have received a certain amount of money?
- No! You will continue to receive the same monthly payment for as long as you live in your home.
- Can I be forced to sell or vacate my home if the money I owe on the loan exceeds the value of my home?
- Absolutely not! As long as you continue to occupy the property as a principal residence, you will not be forced to sell or vacate your home—even if the total of the mortgage payments made to you, plus interest, exceed the value of the property.
- What if I owe more money than the home is worth
- If the loan balance is greater than the value of the home, the family can give the house back to FHA or Fannie Mae. It is a non-recourse loan, which means the house stands for the debt. There will NEVER be a debt to the heirs. If there is money left after paying off the existing loan, the family or heirs receives the money.
- Will a formal appraisal be required to get a reverse mortgage?
- Yes. The value of your home is one of the factors which will determine how much money you can receive. LEXINGTON REVERSE will order the appraisal which is normally paid for by the borrower upon application.
- Will I need an attorney to get a reverse?
- An attorney is not required but we encourage the borrower to seek advice from a family member and/or legal, tax or financial advisor before committing to a reverse mortgage.
- Will I be required to receive counseling before I can get a reverse mortgage?
- Yes. Counseling is required and this educational session is designed to inform you and reconfirm the mechanics of reverse mortgage. LEXINGTON REVERSE will provide you the name and phone number of an approved reverse mortgage counselor.
- Are there any restrictions on the use of the money?
- None whatsoever. You can use the proceeds to pay off medical bills, purchase or pay for health insurance or health care, life insurance, repair your home, purchase a second home, pay for college tuition for your grandchildren, travel, put it in the bank or use it anyway you choose.
- Must I make monthly mortgage payments?
- No. There are no payments so long as the owner(s) continue(s) to occupy the home as their primary residence. The homeowner is only responsible to maintain the home, pay for insurance and property taxes.
- Do my heirs have to sell the house to repay the reverse mortgage?
- No. They can repay the balance due on the reverse mortgage and keep the home. If they choose to sell the home they keep the excess proceeds of the sale after satisfying the mortgage.
- Are my heirs responsible for the reverse mortgage if it exceeds the value of the home?
- No. Your estate is not responsible for this mortgage. This is a non- recourse loan.
- Will my estate have to pay taxes on the proceeds I received from the reverse mortgage?
- No. The proceeds are tax free. (But please consult with your tax advisor).
- How much will be owed at the end of the reverse mortgage?
- The amount borrowed, the accrued interest, the mortgage insurance premiums accrued, services fees and any of the costs or fees financed as part of the reverse mortgage. There are no prepayment penalty fees.
