FAQs » Reverse Mortgages

With a home equity loan, you receive the money up-front and pay it back in monthly installments. With a reverse mortgage, you can receive the money as a lump sum or in monthly payments, and then you must pay it back once you sell the home, move or pass away. These loans also have different requirements to qualify. For example, there is no minimum credit score required for a reverse mortgage. However, with both loan types, you’ll be required to pay your property taxes and insurance.

A reverse mortgage is a loan that lets you borrow the equity in your home. Unlike traditional mortgages, you receive the money from a reverse mortgage up-front, either as a lump sum or in monthly payments. Then, you pay the loan back when you sell the home, move or pass away. Reverse mortgages are typically available for people who meet all of the following requirements:

• Age 62 or older
• The home is your primary residence
• Most or all of the home is paid off

The amount you can borrow through a reverse mortgage depends on several factors:

• Your age
• The interest rate on the loan
• Your home equity

With a reverse mortgage, you choose how you want to receive your payments. You usually have these options:

• Lump sum
• Monthly payments
• Line of credit
• A combination of the above options

To be eligible for a reverse mortgage, you must be at least 62 years old. You either need to own your home outright or have a low mortgage balance, and the home must be your primary residence. If you want to take out a Home Equity Conversion Mortgage (HECM) you also need to meet with a federally-approved reverse mortgage counselor.

No. Your lender cannot foreclose on (or take away) your home if you outlive your reverse mortgage. The lender can, however, foreclose if you fall behind on property taxes, homeowner’s insurance or home maintenance, or if you move away.

It’s not likely you’ll be able to leave your home to heirs after a reverse mortgage. With reverse mortgages, you have to pay back the loan, plus interest and fees, when you sell the home, move or pass away. If there’s any remaining equity in your home at that time, it belongs to you or your heirs.