Reverse Mortgage FAQ's
Lots of questions come our way about specifics of a reverse mortgage. Redwood Financial Services is committed to giving you all the facts, so you can make your decision in an informed manner. A list of the more common questions asked are listed below. Please feel free to browse the site, making notes on anything you may have questions on.
1. Can I do a reverse mortgage if I owe nothing on my home?
This may sound obvious, but absolutely. This allows for more available cash to take care of any non mortgage obligations you may have.
If you do owe something on your home, you can still do the reverse mortgage. The first thing to pay off is the existing mortgage on your home. Then if you have any liens or second mortgages on your home, we will pay those off. After that, any remaining available equity will be used as a credit line, monthly income, or a lump sum disbursement. You get to choose.
2. Can I do a reverse mortgage if I am behind on my taxes?
This is a great reason to use a reverse mortgage. It will allow you to be caught up on any past due bills and get those creditors off your back.
3. Do I have to give up the title to my home?
You will use your home as collateral for the new loan. You do not give up your home. You retain all the rights to refinance or sell, and the remaining equity is always yours.
4. Can I purchase a home with a reverse mortgage?
Starting January of 2009, there is a purchase program for reverse mortgages. Click here to see more information.
5. What happens if I use up all my equity?
It takes a long time to "use up" your equity. If your home appreciates at all, the time frame to use up your equity is usually 20-30 years. You can have an amortization schedule show you the expected time frame. In the event you do use all your equity up, the lender cannot force you out of your home. The note is written to allow you to not repay the loan until you no longer live there as your primary residence.
6. Can I be kicked out of my home at any time?
Technically, yes. If you do not pay your taxes and insurance, you can be foreclosed on.. This is your only concern with your reverse mortgage. Since you are not making payments, the lender can never give you the boot.
7. When do I have to repay the loan?
The notes are written to be repaid on the 150th birthday of the youngest borrower. The triggering event for most of us though will be when none of the borrowers live in the home as their primary residence. This could mean passing away, moving to a retirement home, or just because you want to sell. As stated before, any remaining equity will go to the property owner. Whether it is you or your heirs.
8. My home is a manufactured home, can I do a reverse mortgage?
As long as your home is a post HUD (built in June of '76 or newer), doublewide (or bigger) manufactured home on real estate (owned land), you could qualify. See more about property requirements here.
In theory, you can do a manufactured home on leased land, in a park for example, but the conditions are pretty tough to meet. As a side note, manufactured homes in a park, where you also own the land, is acceptable.
9. Can I defer my property taxes while in a reverse mortgage?
Yes you may. In Oregon, you are allowed to defer your property taxes. If they are already deferred, you will need to bring them current. After completing a reverse mortgage, you may again defer the taxes.
10. How does the money we receive affect our taxes?
It doesn't. The proceeds from a reverse mortgage are not taxable. They also do not have any impact on Medicare or Social Security. Do realize though, that the proceeds could have an effect on Medicaid or SSI.
11. How much money is available to me?
This is determined by a reverse mortgage calculator. You may see what is available, approximately, with our reverse mortgage calculator. Get free reverse mortgage comparison. Do you have a question that wasnt answered here? If so, send an email and we will get you an answer right away.
