06/07/2022
FAST FACTS about reverse mortgages:
1. There are over 9 trillion dollars of untapped home equity in Baby Boomers’ homes.
2. Reverse Mortgages have an 83% satisfaction rating for borrowers who have a reverse mortgage loan, according to a study done by Ohio State University.
3. With a reverse mortgage, you have the option to repay as much or as little of the loan balance each month as you would like, or you can make no monthly mortgages payments at all. Of course, you must still maintain the home and pay homeowners insurance and property taxes.
4. The FHA-insured Home Equity Conversion Mortgage (HECM) was signed into law on February 5, 1988, as part of the Housing and Community Development Act of 1987.
5. A Reverse Mortgage Line of Credit has a growth feature—giving the borrower access to even more funds in retirement (applies to unused funds).
6. The age to qualify for a reverse mortgage loan is 62 or older.
7. With a reverse mortgage, as long as all loan terms continue to be met, the non-borrowing spouse can still live in the home should the borrower predecease them. Terms include living in the house as your primary residence, maintaining the home, and paying home expenses such as taxes and insurance.
8. Mortgage insurance is built into every reverse mortgage loan.
9. Borrowers can escrow the taxes and insurance over the life of the reverse mortgage through a Life Expectancy Set-Aside (LESA).
10. Qualifying for a reverse mortgage loan does not include a specific credit score. (However, minimal credit, income, and property qualifications do apply.)
11. Your heirs are still entitled to the remaining equity balance, if any, after the loan has been paid off. (This does not constitute legal advice. Please consult an attorney for your specific situation.)
12. All borrowers must get HUD-approved counseling prior to getting a reverse mortgage loan.
13. The maximum claim amount on a HECM reverse mortgage loan is now $970,800, as of January 1, 2022.
14. Accessing a portion of your home equity with a reverse mortgage loan early on could potentially allow all of your investments to last longer.
15. The proceeds from a reverse mortgage loan can be used to help divide assets in a divorce.
Some of the most common myths around reverse mortgages are compiled in this article, along with the facts on reverse mortgages you need to know.
