With better health care and education, Senior Citizens today can look forward to living much longer lives than their earlier counterparts. However, they are also finding it increasingly difficult to live on their fixed incomes and are often faced with difficult choices. Reverse Mortgages have become an increasingly popular tool that allows homeowners to convert the value of their homes into cash in a variety of ways. To help you make informed decisions for you and your loved ones, I’d like to answer some of the most com­mon questions about Reverse Mortgages.

What Is a Reverse Mortgage? Quite simply, a “reverse mort­gage” is a loan against your home that you do not have to pay back for as long as you live there.

What are the most common uses for a Reverse Mortgages? They are most often used to pay off an existing “forward” mort­gage, pay for medical costs, help with home maintenance and increase quality of life.

How can I receive the money from a Reverse Mortgage? The cash can be paid to you in several ways: All at once, in a single lump sum of cash; A regular monthly advance; A ‘credit-line’; or any combination of these pay­ments.

How old do I have to be to be eligible? You must be 62 years of age or older and own your home.

Do I need to have good credit or minimum income? There are NO minimum credit score or income requirements.

Will the lender take my house? The Lender will NOT take your house. The Reverse Mortgage is secured by a deed of trust or mortgage, much like any prior mortgages you may have held. You sign a note and a mortgage, with your property as security for that loan; the only difference is that you no longer have to make monthly mortgage payments.

When do Reverse Mortgages have to be paid back? Reverse mortgages are due and payable when you die, permanently leave your home, can no longer main­tain the home or fail to pay the property taxes and insurances.

How much will a Reverse Mortgage cost? Reverse Mortgages can be costly. However, when you compare it to other loan options, the benefits will outweigh the costs. The major benefit of the Reverse Mortgage is not having to make required monthly mortgage pay­ments. There are several types of Reverse Mortgages; overall costs vary by product. All clos­ing costs can be paid out of the proceeds of the loan.

What happens if I owe more than my home is worth? The reverse mortgage is a ‘non-recourse’ loan, which means that you will NEVER have to repay more than the current market of your home at the time the loan comes due, nor will your heirs. While the loan balance can exceed the property value, neither you nor your estate will ever be obligated for more than the appraised property value.

Will my children lose their inheritance? Houses typically continue to appreciate over time with a high percentage of houses still retaining enough equity to pass down to one’s heirs. Since the home will remain in your name, you retain the right to bequeath the property to whom­ever you choose. If there is equity remaining in the property, it will go to your beneficiaries, as you will your heirs.

As you explore whether or not a Reverse Mortgage will fit your needs, keep in mind that it is important to speak to a Certified Mortgage Planning Specialist who is versed in these products and will work together with your financial planners, tax advisors and elder law attorneys to ensure that you are making the best decision. The more you know, the happier you will be with the decisions you make. Call me for a free confidential consultation to discuss your financial situa­tion and the benefits of a Reverse Mortgage.