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Reverse Mortgage Loans

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Here are some of the most common misconceptions about Home Equity Conversion Mortgages (HECMs) — also known as reverse mortgages— and the truth behind these myths:

“A reverse mortgage requires giving up ownership of your home.”

False. As the borrower, your name remains on the title and the home is still yours—just as it would be with any mortgage. You’re required to continue paying real estate taxes, homeowner’s insurance, and providing basic maintenance to your home. Once you no longer live in the home as your primary residence, the loan balance, including interest and fees, must be repaid. This is usually done by the homeowner or their estate selling the house.

“A reverse mortgage should only be used as a last resort.”

False. Many Homeowners age 62 and older are now using a reverse mortgage strategically as part of a sound financial plan. For example, a reverse mortgage line of credit can serve as a cash reserve that you can tap as needed. (And unlike a traditional Home Equity Line of Credit, the unused reverse mortgage credit line actually grows over time.) Or, monthly advances can help you supplement other retirement income, so you can avoid withdrawing savings or liquidating invested assets. In any case, no monthly mortgage payments are required, which can improve your cash flow and help you live more comfortably. Your from will be pleased to work with you and your financial advisor to develop a solution that’s right for you.

“There are restrictions on how I can use the money from a reverse mortgage.”

False. Reverse mortgage proceeds can be used in multiple ways. Among the most common uses are paying off an existing mortgage or other debt in order to have no monthly mortgage or debt payments; creating a cash reserve; supplementing monthly income; paying for home improvements; or covering medical bills or long-term care expenses.

“I could wind up owing more than my house is worth with a reverse mortgage, and leave my heirs with debt.”

Not so. With most financial products, there are a number of factors to consider before you can choose what’s best for you. With , you can rely on your to be a trusted resource for clear information and responsible guidance. In addition, before you apply for a government-insured Home Equity Conversion Mortgage, you are required to receive reverse mortgage counseling from a third-party counselor who’s approved by the U.S. Department of Housing and Urban Development (HUD). These independent counselors are not affiliated with , and their job is to ensure you fully understand every aspect of your reverse mortgage.



The funds can be used in multiple ways, including supplementing your income, paying for a large expense, or preparing for future needs. As you explore your reverse mortgage options with , an experienced Reverse Mortgage will serve as your guide throughout the entire loan process. Here’s a basic overview of what you can expect:

1. One of our experts will contact you to:

  • Carefully assess your individual needs and financial situation. This includes reviewing your income, assets and expenses; talking with you about your particular plans and concerns; and estimating how much money you may qualify for.
  • Thoroughly explain the eligibility factors, benefits, features, options, costs and borrower obligations associated with reverse mortgage products.
  • Answer all your questions, and help you determine if a reverse mortgage is the right solution for you— and if so, which type best fits your needs and goals.
  • Prepare you for your reverse mortgage counseling session.

2. Independent Counseling

To ensure that you understand all aspects of a reverse mortgage, you’re required to have a counseling session with an independent counselor who’s approved by the U.S. Department of Housing and Urban Development (HUD). It usually takes about 60 to 90 minutes and can be done in-person or over the phone. (Some states require face-to-face counseling.)

3. Application

  • If you decide to proceed with the loan, your complete the application and collect your documentation. Some of the required documents are: Your signed counseling certificate, photo identification, verification of Social Security number, recent property tax bill, proof of homeowner’s insurance and existing mortgage bill (if applicable). A required financial assessment will review your finances, specifically your credit history, income and debts. This helps determine whether the borrower will need to set aside part of the mortgage proceeds—based on the results of the financial assessment
    —to pay for loan obligations. Your Loan Officer will let you know exactly which documents you’ll need to provide.
  • A notary or lender representative will come to your home to assist you in signing your application and will also collect all of the supporting documents.

5. Closing

  • When the final loan documents are ready for your signature, we’ll contact you to schedule your loan closing, which can take place at your home.
  • Any existing mortgage(s) must be paid off with a portion of the proceeds from your reverse mortgage. After the closing and any applicable rescission period, the loan will fund and you’ll receive your money.


A reverse mortgage is a loan that enables homeowners who are at least 62 years old to convert some of their home equity into cash, a line of credit, or to finance a home purchase with the freedom of no monthly mortgage payments. The borrowers continue to live in and own their home.

A reverse mortgage is a loan that enables homeowners who are at least 62 years old to convert some of their home equity into cash, a line of credit, or to finance a home purchase with the freedom of no monthly mortgage payments. The borrowers continue to live in and own their home.

1. Am I Eligible?

To be eligible for a reverse mortgage:

  • All titleholders must be age 62 or older.
  • The home must be the borrowers’ primary residence, and must meet Federal Housing Authority (FHA) minimum property standards.
  • You must have sufficient home equity.A from cantellyouif you have enough home equity to qualify.

2. Will the Bank Own My House?

No. Just like a traditional mortgage, as long as the terms of the loan are met, the borrowers retain full homeownership and can sell the home at any time.

3. How Much Money Can I Get?

This is determined by the age of the youngest borrower, or eligible Non-Borrowing Spouse, your home value, the amount of equity, FHA lending limits, the current interest rate, and the reverse mortgage product and payment option you choose. A from can provide you with a quote that’s tailored to your specific situation, with no cost or obligation.

4. How Do I Receive My Proceeds?

You can take your funds as a lump sum; monthly payments for a specified time period, or for as long as you live in the home; a line of credit; or a combination of these.

5. Is the Reverse Mortgage Insured?

The HECM reverse mortgage is insured by the Federal Housing Administration (FHA) to protect lenders and borrowers alike. This insurance guarantees you will receive your loan proceeds as agreed upon with the lender at the closing of the loan.

6. What are the Costs Associated With a Reverse Mortgage?

In addition to interest, the costs include a title fee, credit report fee, real estate settlement closing costs, a property appraisal fee, origination fee, closing costs, mortgage insurance premium, servicing fee and a modest charge for HECM counseling. While closing costs vary based upon the type and size of the loan, they’re the same as those for any traditional mortgage.

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