FAQs - Reverse Mortgage

A reverse mortgage is a type of loan designed for adults over the age of 62 who wish to convert some of the equity built in their residence into money, without the need to sell the property, give up the title, or take on a traditional mortgage loan. This product allows you to receive cash while continuing to live in your home.

To be eligible, the following is required:

• Own a home that serves as one's primary residence.
• Be 62 years old or older. If multiple owners are listed on the title, all must meet the age criteria.
• Hold the title in your name and exclude any co-owner under 62 years of age.
• Even if a mortgage balance still exists, one can qualify as long as it is paid off when the loan is made.

The following properties are eligible:

• Single-family homes
• Condominiums
• Mobile or Prefabricated Homes
• Residences with 1 to 4 units

These properties must be habitable and comply with the established standards.

Money can be received in various ways depending on one's financial needs:

1. Monthly payments, for a fixed period or for the rest of one's life.
2. Line of credit, to use funds as required.
   
3. Combination: receiving an advance portion and the remainder in payments or as a line of credit.
   

The funds from a reverse mortgage may be used freely for medical expenses, home repairs, paying off debt, improving retirement income, or any personal need. There is no specific limitation regarding its use.

The loan becomes due when:

• The owner permanently relocates and ceases to use the home as a primary residence for more than a year.
• The property is sold, expropriated, or there is a court order that affects the home.
• It may also become payable if there is fraud or false information in the application (as specified in the English version).

The owner retains the title to the home at all times, just as with a traditional mortgage. The creditor places a lien solely for the amount of the loan.

Yes. The appraisal is a fundamental requirement because it determines how much money can be obtained through a reverse mortgage. Generally, the creditor coordinates this process, and the cost is usually borne by the applicant, although some lenders may cover it.

To complete the loan process, the heirs must transfer or sell their share of the property, ensuring the title remains solely in the applicant's name. After the death or transfer of the property to the heirs, the loan must be settled.

Consumer has certified reverse mortgage counselors who can guide you. To schedule an appointment, you may call (787)722-8835.