Reverse Mortgage Insight
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For a person of 62 age or older, the idea of a reverse mortgage is good. You can borrow against your home’s equity that lets you tap cash for retirement or vacations without the need to sell your family home.
Here are some important facts about the reverse mortgage that you must know before having it.

1.   Proceeds from Reverse Mortgage Are Free From Tax 

Since a reverse mortgage is a loan advance and not an income, the proceeds from these home equity loans are not taxable. It will not affect your social security and medical benefits.
Also, the interest in reverse mortgage payments is not deductible until you pay it. You can pay all interest in one time when you plan to pay off the loan. For tax-related conditions, you should, however, consult a tax professional to be sure.

2.   Many Ways Of Receive the Proceeds from the Reverse Mortgage 

Monthly payments: If you pay every month to control your proceed spending, monthly payments may be a great option for you. These run as long as you are alive and living in your home.
A lump sum money: It is a fixed term of payments, after which you will receive no money, even if you still live in your home. To make a large payment, such as home repairs, medical bills, etc, it is the best option.
Flexible line of credit: With this option, you can get access to money you need. You can decide how much you want to withdraw according to your need your lender can’t put any minimum withdraw condition on you.
Last but not least you can also receive the reverse mortgage payments with a combination of any of the above options.

3. You Can Sell A Home With A Reverse Mortgage

You can sell your home with a reverse mortgage at any time, like other traditional mortgages. When you sell your reverse mortgaged home, you need to pay back the mortgage balance to the lender and the lender will close your loan account. After repaying the loan amount with interest, you can keep the extra money with you, which you can use in any way you want.

4. Reverse Mortgages Offer A Portion Of Your Home Equity

You won’t be able to access all the equity in your home with a reverse mortgage. The Federal Housing Administration (FHA) calculates the maximum mortgage amount based on different factors. These factors include your age, home’s appraised value, and available equity.

5. There Are Different Types of Reverse Mortgages

Single-Purpose Reverse Mortgage: It is often offered by local, state, and non-profit agencies and it you can use it for a state-specific purpose
Home Equity Conversion Mortgage (HECM): It is federally insured mortgage, that you can consider for extra income after retirement. Yo have to attend approved counseling session before applying for this. 
Proprietary Reverse Mortgage:  It is available to those who have homes with high value. It is not insured by the government.

6. You Own The Title Of Your Home With Reverse Mortgage

You retains the title and ownership of your home during the life of the loan. In addition, you can even sell your home at any time (the loan will just become due and payable). Keep in mind that the lender will add a lien onto the title to guarantee payment, as with a traditional mortgage.

7. After Your Death Heirs Can Keep The Home By Paying Off The Balance 

If your heirs can keep your home after your death with a reverse mortgage, but the loan must be paid off. Your heirs do not need to pay more than the full loan balance or 95 percent of your home’s appraised value.
If heirs want to sell, they can also sell your home and after pay off reverse mortgage balance they can keep the remaining money.

8. You Can Refinance Your Existing Mortgage

Some seniors get an amount of mortgage debt into retirement. It means they’re responsible to pay interest and principal amount that may add up to thousands of dollars every year. However, with a reverse mortgage, you can refinance your existing mortgage debt to eliminate your mortgage payment and free up cash for monthly expenses.

9. Most Reverse Mortgages Come With A Government Guarantee

Most of the reverse mortgages including HECM loans come under the government-insured program. There are private lenders too who offer a reverse mortgage with some additional benefits to you, such as the ability to borrow a higher level of home equity. Ask a reverse mortgage specialist like Brett for more details.

10. You Can Use the Reverse Mortgage Proceeds for Anything

You can use the money received from a reverse mortgage in any way you want. You can use it for home repairs, shopping, traveling, medical bills and more.


A reverse mortgage is different from traditional loans as with this, you do not need to make any monthly payments instead lender will you. If you are planning for reverse mortgage use our calculator to know your eligibility and to know how much you receive with it. Also, consult some professionals like Brett because he can handle the process with ease.

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