There has been a lot of talk and advertising about ‘Reverse Mortgages’ these days, and although they may work for some, a Reverse Mortgage may not be suitable for all seniors. A Reverse Mortgage is a loan against your property, using the equity you have built up in the home. You do not have to pay the loan back as long as you live in the home.
Here are a few of the qualifications you must meet in order to qualify for the Housing and Urban Development (HUD) Reverse Mortgage program: You must be at least 62 years old and a homeowner. You must also live in the home and either own it free and clear or have a low mortgage balance. There cannot be any lien(s) on the property, homeowners insurance will be required, and if you no longer use it as your primary residence, or sell it, then the loan must be paid back. *In some cases it would paid by your estate. The amount to be paid back for the Reverse Mortgage will probably include not only the lump sum of the initial loan, but interest and other ‘fees’ as well. Should your home sell for less than the initial loan amount, FHA will reimburse the difference (to the lender) between the sale proceeds and the Homeowners Insurance payoff received by the Reverse Mortgage lender.
The amount of money you receive depends on several variables, such as your age, the amount of equity you’ve built up and the value of the property. You can choose to receive the funds in various ways; either in one (tax free) lump sum, a line of credit, or in a monthly amount. Use can also choose a combination of the three. There is a percentage fee charged, usually 2% of the home's value, which is used as an up-front payment. There may be other costs as well, so be sure to research your options thoroughly and talk to a Reverse Mortgage professional.
HUD requires that you get consumer information from an approved counseling agency before applying for a Reverse Mortgage. You can call the Housing Counseling Clearinghouse at (800) 569-4287 to get a number of a HUD approved counseling agency, or call me directly (916) 663-6300 to get the number of an FHA approved lender in your area.

Terrie Hunt, Broker/Owner
River Ridge Realty (916) 663-6300. “Outstanding Life Member” of the Sacramento Association of Realtors. DRE #01213387
www.RiverRidge Realty.net – Success and Experience Working For You