Myth vs. Fact: Does the bank own my home?
Fact: This is the most common myth. You retain the title and ownership of your home throughout the life of the loan. You are simply required to pay your property taxes, homeowners insurance, and keep the home in good condition.
Is financial counseling required?
Yes. Before closing, you must complete a counseling session with an independent, third-party agency. This is a valuable protection that ensures you fully understand the loan program, its features, and your obligations before making a final decision.
What happens to the home when I pass away? What are the options for my heirs?
When the last borrower leaves the home, your heirs will have several options. They can:
- Repay the loan and keep the home, often by refinancing or using other assets.
- Sell the home to repay the loan and keep any remaining equity.
- Deed the home to the lender. If the loan balance is greater than the home’s value, they can give the home to the lender to satisfy the debt. Your estate will never owe more than the home’s appraised value at the time of sale.
What are the costs involved in a reverse mortgage?
Like any mortgage, there are costs involved. These can include an origination fee, third-party closing costs (like appraisal and title fees), and mortgage insurance. These costs can often be financed into the loan itself, meaning you have minimal out-of-pocket expenses. We will provide a detailed breakdown of all costs so there are no surprises.
I’ve updated the age requirement in both the main summary and the qualification section. Please let me know if you’d like any other adjustments!