Here are some common questions people often have about reverse mortgages:

1. What is a reverse mortgage?

A reverse mortgage is a financial product that allows homeowners, typically age 62 or older, to convert a portion of their home equity into cash. Unlike a traditional mortgage, you do not have to make monthly payments; instead, the loan is repaid when you sell the home, move out, or pass away.

2. Who is eligible for a reverse mortgage?

To qualify for a reverse mortgage, you must be at least 62 years old, own your home outright or have a small mortgage balance, and live in the home as your primary residence.

3. How much money can I get from a reverse mortgage?

The amount you can borrow depends on several factors, including your age, the value of your home, and current interest rates. Generally, older homeowners can access more equity.

4. Are reverse mortgages taxable?

No, the money received from a reverse mortgage is typically not considered taxable income. However, you should consult a tax advisor to understand your specific situation.

5. Do I have to make monthly payments?

No, with a reverse mortgage, you are not required to make monthly payments. The loan is repaid when you sell the home, move out, or die. However, you are still responsible for property taxes, homeowner’s insurance, and maintenance.

6. What happens if I outlive my loan?

As long as you continue to live in the home and meet the loan requirements (such as paying taxes and insurance), you can stay in the home. The loan is only due when you sell, move, or pass away.

7. Can I lose my home with a reverse mortgage?

Yes, you can lose your home if you fail to meet the obligations of the loan, such as not paying property taxes, homeowner’s insurance, or neglecting the maintenance of the home.

8. What happens to my heirs?

When you pass away, your heirs can either pay off the reverse mortgage and keep the home or sell the home to repay the loan. They will not be responsible for any amount exceeding the home’s value due to the non-recourse nature of reverse mortgages.

9. Are there fees associated with a reverse mortgage?

Yes, reverse mortgages typically come with closing costs, such as origination fees, appraisal fees, and mortgage insurance premiums. It's important to review all fees before proceeding.

10. How can I find a reputable lender?

Research and compare lenders, read reviews, and look for those who are members of the National Reverse Mortgage Lenders Association (NRMLA). It can also be helpful to consult a trusted financial advisor.

These questions provide a solid overview of reverse mortgages, but it's advisable to conduct thorough research and consult professionals for personalized advice specific to your situation.