Reverse Mortgage Loan


Reverse Mortgage Loan

Reverse Mortgage Loan

A reverse mortgage loan is considered to be a loan that is usually available to homeowners who are 62 years or older and it allows them to convert a part of the equity in their home into cash. A reverse mortgage loan will let senior homeowners use a portion of their home’s equity as collateral. A reverse mortgage loan usually does not have to be repaid until the last surviving homeowner permanently moves out of the home or passes away. When that happens, a reverse mortgage loan has to be paid back by the estate within 6 months or sell the home to pay off the balance.


To be eligible for a reverse mortgage loan, the Federal Housing Administration (FHA) will require that all homeowners need to be at least 62 years of age. The home will need to be owned free and clear from all existing liens but still be able to be satisfied with a reverse mortgage loan. With a reverse mortgage loan, there are generally no income or credit score requirements that will need to be followed. A reverse mortgage loan cannot be outlived as long as the homeowner maintains the home as their primary residence and keeps paying the taxes and insurance on the home, the reverse mortgage loan will not become due. In the event that the homeowner dies or if the home ceases to be their primary residence for more than 12 months, the estate of the homeowner will need to repay the reverse mortgage loan or put the home up for sale. In a reverse mortgage loan, the amount that is available will usually depend on four factors: age, current interest rate, appraised value of your home, and any government imposed lending limits.