How Does A Reverse Mortgage Work?

A Reverse Mortgage is simply a home loan for Senior Homeowners. With your Reverse Mortgage, you the owner retain complete ownership and control of your home - just like with any other home loan.

With a Reverse Mortgage, the lender sends cash to you according to the plan you select. You make no monthly mortgage payments for as long as you live in your home. The more cash you receive, the greater the loan balance owed against the property.

A Reverse Mortgage is a non-recourse home loan. This means there is no personal liability to you or your Heirs, no matter what. The lender can only look to the property for repayment (FHA insures the lender against loss at repayment if the loan balance at that time exceeds the property value).

Also, FHA insures you, the Homeowner, against loss in case of lender default - both Homeowner and lender are insured against loss.

Repayment is due after all Homeowners permanently vacate the home (die, sell, or permanently move out). That repayment comes out of the equity, or by any other means chosen - your Heirs could refinance the home, or write a check, or sell the property.

Typically, the property is sold and the loan is repaid - any remaining equity belongs to you or your Heirs.