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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 Does a Reverse Mortgage Work?
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HUD reverse mortgage do not require repayment as long as the borrower lives in the home. The loan is repaid when the home is sold. Any remaining proceeds from the sale of the home are returned to the homeowner or to the survivors.
If the sales proceeds are insufficient to pay the loan balance, HUD will cover the shortfall with no further obligation from the borrower.
Homeowners can choose to receive payments in a lump sum, on a monthly basis (for a fixed term or for as long as they live in the home), or on an occasional basis as a line of credit. Homeowners whose circumstances change can restructure their payment options.
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