Benchmark

 
A reverse mortgage is a program that allows a senior homeowner to tap into a portion of the equity in their home. Unlike a traditional mortgage, the reverse mortgage does not require a borrower to make a monthly payment on the money they borrow (unless they want to).

The most popular reverse mortgage is insured through the Federal Government (the FHA) and is called a Home Equity Conversion Mortgage (or HECM for short). A borrower must be at least 62 years of age to qualify (if it is a married couple, one spouse can be younger than 62 but the other must be over 62). There are also certain proprietary reverse mortgages (non FHA) that allows a borrower to be as young as 55 and still qualify.

Borrowers always maintain ownership of the home, and may sell the home whenever they choose. A reverse mortgage is paid back when all the borrower(s) no longer own or live in the home. The lender does not get the home when the borrower passes away. The estate will inherit the home (just like a traditional mortgage). Neither the borrower or the estate can never owe more on the reverse mortgage than the home is worth upon death or sale. The borrower is always responsible for all property charges. Homes do not have to be paid off to qualify as long as the proceeds are sufficient enough to payoff any existing debt against the home.