How to Get Extra Money with a Reverse Mortgage

Homeowners 62 and older may qualify for what is called a Reverse Mortgage. A reverse mortgage is a federally (HUD, FHA) insured loan program that allows elderly homeowners to convert their home equity into cash payments. Here's how to qualify.

Difficulty: Moderate

Instructions

1. YOU must be at least 62 years old. The reverse mortgage is designed to assist senior citizens who need extra income to pay for bills, prescriptions or other expenses.

2. YOU must own and live in your home. Homes that qualify are single family residences, condos and manufactured homes that meet FHA requirements.

3. GET a home appraisal and inspection. The loan amount you receive from the reverse mortgage is determined in part by your home's value in addition to your home location, current interest rates and your age.

4. GET counseling. HUD requires that applicants receive financial counseling from a HUD-approved counseling agency. The counseling provides you with consumer information about the reverse mortgage.

Tips & Warnings

• Once approved the homeowner receives a lump sum, monthly payments, a line of credit or a combination of the above options.
• The loan is repaid after the homeowner dies, sells the home or moves out of the home.
• Reverse mortgages are expensive. And reverse mortgages offered by private companies or more expensive than those insured by the government.

Resources

• Reverse Mortgage Q & A
• Reverse Mortgage Calculator
• HUD Approved Housing Counseling Agencies