Learning
Eligibility
To be eligible for a reverse mortgage the FHA requires that the youngest homeowner be over the age of 62 and own their home free and clear.
Property
Most property types are eligible for a reverse mortgage. Mobile homes need to be built within the last 30 years, land must be owned and the property must be FHA approved.
Inheritance
If the last surviving homeowner moves away or passes away when the estate can choose to pay back the balance or sell the home to repay the loan. If there is money after the balance has been repaid then the estate will keep it. If there is not enough money after the sale, then the estate is not held personally responsible for the remainder of the balance and the lender takes the fall.
Loan limit
The amount of money to be taken out is dependent on age, appraisal of the property and current interest rate.
Allotment of finances
- Lump sum: lump sum of cash at closing
- Line of credit: draw any amount at any time until all funds are withdrawn
- Term: equal monthly payments for a fixed number of years
- Tenure: equal monthly payments as long as the homeowner lives in the home
