To qualify for a reverse mortgage, you must be at least 62 and have paid off all or most of your home mortgage. Income is generally not a factor, and no medical tests or medical histories are required. If you seek an HECM, you also must undergo free mortgage counseling from an independent government-approved “housing agency.” Financial institutions offering proprietary reverse mortgages may require similar counseling or homeowner education.
The amount you can borrow depends on your age, the equity in your home, the value of your home, and the interest rate. If it’s an HECM, federal law limits the maximum amount that can be paid out.You can be paid in a lump sum, in monthly advances, through a line of credit, or a combination of all three.
Common Features
Reverse mortgages offer special appeal to older adults because the loan advances, which are not taxable, generally do not affect Social Security or Medicare benefits. Depending on the plan, reverse mortgages generally allow homeowners to retain title to their homes until they permanently move, sell their home, die, or reach the end of a pre-selected loan term. Generally, a move is...
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