Frequently Asked Questions (FAQs) About Reverse Mortgages
It’s natural to have a lot of questions. Here are clear, simple answers to some of the most common ones we hear.
Can the bank take my home?
No, the bank cannot just take your home. As long as you meet the terms of the loan—living in the home as your primary residence, paying your property taxes and homeowners insurance, and maintaining the property—you retain ownership and can live there for the rest of your life. The loan only becomes due when you no longer meet those terms.
What happens if my spouse passes away?
If both you and your spouse are co-borrowers on the loan, nothing changes when one of you passes away. The surviving spouse can continue to live in the home under the same loan terms. If only one of you is a borrower (perhaps because the other was not yet 62 when you got the loan), there are protections for an “Eligible Non-Borrowing Spouse.” As long as they were married to the borrower at the time of the loan and meet certain other criteria, they can typically remain in the home after the borrowing spouse passes away, but they will not receive any additional loan proceeds.
Will a reverse mortgage affect my Social Security or Medicare?
Generally, no. The funds you receive from a reverse mortgage are treated as loan proceeds, not income. Therefore, they do not affect your eligibility for Social Security retirement or disability benefits, or for Medicare. As mentioned earlier, however, the funds could affect needs-based programs like Medicaid or SSI if you keep a large balance in your bank account.
How much money can I get?
The amount of money you can borrow with a reverse mortgage depends on several factors: the age of the youngest borrower (or eligible non-borrowing spouse), the appraised value of your home, and the current interest rates. In general, the older you are and the more valuable your home, the more money you will be able to access.
Can I get a reverse mortgage on a condo?
Yes, it is possible to get a reverse mortgage on a condominium. However, for a HECM, the condominium project must be approved by the Federal Housing Administration (FHA). You can check if your condo development is on the FHA-approved list, but it’s best to speak with a lender who can verify this for you.
