Just What is a Reverse Mortgage?
A reverse mortgage is a special type of loan which enables homeowners age 62 and above to convert part of the equity in their home into tax-free cash without having to sell the home, give up title, or take on a new monthly mortgage payment. A reverse mortgage will not affect Social Security or Medicare, and there are no health qualifications or stipulations on the use of the proceeds. And although no monthly mortgage payments are required, you are free to make mortgage payments at any time throughout the year.
Currently, the federally insured reverse mortgage that is available is the Home Equity Conversion Mortgage (HECM) created by the federal government and managed by the Department of Housing and Urban Development (HUD). To qualify, the HECM requires that all borrowers:
* Be at least 62 years of age at closing and own their home
* Reside in a single family home as their primary residence (1-4 units, FHA approved condos, PUDs, manufactured homes, some mixed-use)
* Receive HUD-approved reverse mortgage counseling
* Not be delinquent on any federal debt
If your home is valued at over $500,000, there is a proprietary JUMBO reverse mortgage product available. A reverse mortgage comparison will outline which program is best for you. (SEE BELOW FOR JUMBO REVERSE MORTGAGES)
About Medicaid Eligibility: Refer to page REVERSE MORTGAGE FAQ on how a reverse mortgage might affect eligibility for Medicaid and other financial assistance programs.