Reverse Mortgage Guidelines
A reverse mortgage uses your home as security and allows you to obtain extra income, either in the form of monthly payments or as a lump-sum payout. The amount of money you can obtain is based on the value of your home.
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General Requirements
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In order to obtain a reverse mortgage, you must be at least 62 years old or older. You must also own your home free and clear, meaning that you don't have an existing mortgage against the home. Also, you have to live in the home.
Income
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Most reverse mortgage lenders, including the Federal Housing Administration, do not require you to have a certain level of monthly income in order to qualify for a reverse mortgage.
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Taxes
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You generally do not have to pay income tax on the money you receive from your reverse mortgage.
Fees
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Lenders charge fees for a reverse mortgage, including origination costs, appraisal charges and closing fees.
Payments
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You do not have to make monthly payments back to your lender with a reverse mortgage.
Repayment
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You must repay your reverse mortgage if you sell your home or move out. Upon your death, your lender will sell your home in order to repay the loan.
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References
Resources
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