It is a special type of loan that allows homeowners to access the equity in their property. Unlike a regular mortgage, there are no monthly repayments to be made as long as you still live in the property.
Do I Qualify?
Reverse mortgages are available to homeowners of 62 years or over. You must live in the house as your primary residence. You should either own the property outright or be able to pay off the remaining mortgage with the proceeds of the reverse mortgage.
What Will I Receive?
You can choose to receive a lump sum payment, a regular monthly income or a line of credit. You can also choose to receive a combination of these different payments.
How Much Will I Get?
The amount that you receive will be dependent on the value of the property, your age and the interest rate. In simple terms you will receive more if you are older, the house is worth more and if the interest rate is lower.
What if I Owe More Than House is Worth?
Reverse mortgages come with what is effectively a no negative equity guarantee. This means you will never be liable for more than your property is worth.
Does My Home Qualify?
In general if you live in a detached home, a townhouse, a 2-4 unit property or a condominium, your property will be eligible. If you live in cooperative housing you are likely to be ineligible.
Who Do I Need To Speak To?
Reverse mortgages are usually arranged through mortgage brokers. But you are also required to speak to a HUD approved counselor. This is to ensure that you have independent advice and understand all of the implications of the loan. This can be carried in person or over the telephone and will typically last for 45 minutes to one hour.
