What are the eligibility requirements for a reverse mortgage?
To qualify for a reverse mortgage, you must be 62 years of age or older and own your home (those with existing mortgages may also qualify). Your home must be your primary residence and meet the minimum property standards established by U.S. Department of Housing and Urban Development (HUD). The property must be a single-family or a one-to-four unit, owner occupied dwelling. Townhomes, detached homes, condominium units, planned unit development (PUDs), and some manufactured homes or new construction properties are eligible.
Will my income affect my eligibility?
No. A reverse mortgage does not require you to make monthly repayments so there are no income requirements such as with a traditional Mortgage or Home Equity Loan.
How much cash can I get?
The amount you can borrow is based primarily on several factors: The age of the youngest borrower on title, the type of loan you select, the current interest rates, the location and value of your home and the current Federal Housing Administration (FHA) lending limits. To estimate the amount you could receive from a reverse mortgage, use our Reverse Mortgage Calculator.
How can I receive the cash?
Provided you don’t have a substantial mortgage to pay off, you can choose from several options: line of credit, lump sum, monthly payments or any combination of these. It’s your equity so you decide what options work best for you.
What are the advantages of a reverse mortgage?
Are there any restrictions on how I use the proceeds?
- Allows you to stay in your home and retain the title
- Eliminates all mortgage payments
- Enables you to use the cash any way you want
- Funds home repairs
- Helps pay off existing debt
- Funds medical expenses and/or long-term care insurance
- Helps you to enjoy additional leisure activities
- Provides easy access to the equity you have built in your home
- Provides funds to improve your quality of life
- Does not affect Medicare or Social Security benefits (Reverse Mortgage cash advances may affect eligibility for other programs, but generally, the proceeds are tax free and do not affect Medicare or Social Security benefits.)
No, there are no restrictions. Of course there was a reason you sought a reverse mortgage. It may be to improve your home, supplement your income, pay for medical expenses, making a major purchase, helping your children or grandchildren, traveling or having funds available for the unexpected. You can use proceeds for virtually anything you want or need.
What if I still have a mortgage or home equity loan?
Depending on the amount of your remaining mortgage and your current home value, you may still be eligible for a reverse mortgage. The proceeds would first be applied to pay off your existing mortgage or home equity loan.
Will a reverse mortgage affect my Social Security or Medicare benefits?
Proceeds from a reverse mortgage will have no affect on Social Security or Medicare benefits because they are not need-based. However, benefits such as SSI and Medicaid may be affected. Your WSFS Reverse Mortgage Loan Officer can provide additional information and you should consult with your local benefits program administrator.
What reverse mortgage products are available?
WSFS Bank offers the FHA Home Equity Conversion Mortgage (HECM) in both variable and fixed rate options.
What are the fees associated with a reverse mortgage?
With a variable-rate, the interest rate may increase or decrease on predetermined adjustment dates. However, it offers the most flexibility in choosing payout options, such as monthly payments, line of credit, lump sum or a combination.
- With a fixed-rate option, your interest rate will remain the same throughout the life of the loan. The fixed-rate reverse mortgage disburses the available proceeds in a lump sum payout only.
In addition to interest, there are other fees and costs involved. There is typically an origination fee, a mortgage insurance premium, title insurance, and attorney fees that you can finance into the loan amount. You will also be expected to continue paying your homeowners insurance premiums and your property taxes, and maintain the property to FHA standards.
When will the reverse mortgage loan become due?
Your loan will be due and payable when you fail to pay property taxes or insurance, or fail to maintain the property, permanently move out, sell the home, or fail to live in the home for 12 consecutive months.
Will a reverse mortgage affect the estate I leave to my heirs?
How much of your home’s equity will be left after repaying the loan depends on many factors: the size and frequency of your loan advances, increases or decreases in your home’s value, future interest rates, and others. You or your estate must repay the lender for the cash received, plus interest and fees. You or your estate can choose how to repay the loan with either other assets, by refinancing or by selling the property. If the house is sold, any proceeds in excess of the loan balance belong to you or your heirs.
Often, the adult children of our senior customers are happy to see their parents able to continue living in their homes and pleased to know that they are financially secure.
Can I refinance my existing reverse mortgage?
Yes, refinancing is possible. If your property has increased in value this may be an option that will make more equity available.
For more information on a Reverse Mortgage, please call WSFS Mortgage at 888-992-7729 or email firstname.lastname@example.org.
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