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Loan Products |
>> Reverse Mortgages |
A Reverse Mortgage is a special type of home equity loan that allows seniors to convert some of the equity in their homes into cash while still retaining home ownership.
 Reverse mortgages work much like traditional mortgages with one important exception: instead of you making a mortgage payment each month, the lender pays you.
Unlike conventional home equity loans, most reverse mortgages do not require any repayment of principal, interest, or servicing fees for as long as you live in your home. Funds obtained from these loans may be used for any purpose, including meeting housing expenses such as taxes, insurance, fuel, and maintenance costs.
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How Much Can I Borrow?
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The size of reverse mortgage loans is determined by the borrower's age, the interest rate, and the home's value. The older a borrower, the larger the percentage of the home's value that can be borrowed.
There are no limits on the value of homes qualifying for a reverse mortgage. However, the amount that may be borrowed is capped by the maximum FHA mortgage limit for the area.
You can choose how to receive the money from a reverse mortgage. The options are: all at once (lump sum); fixed monthly payments (for up to life); a line of credit; or a combination of a line of credit and monthly payments.
The most popular option – chosen by more than 60 percent of borrowers – is the line of credit, which allows you to draw on the loan proceeds at any time.
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