Questions We Get Asked
- What are the qualification requirements for a reverse mortgage?
- Do I have any out of pocket costs to complete a reverse mortgage?
- How much money can I borrow?
- How can I receive my reverse mortgage loan proceeds?
- Do I have to own my home free and clear to qualify for a reverse mortgage?
- Can I pay down or pay off my reverse mortgage loan balance?
- What if I need to change my payment plan?
- How do I repay the loan?
- Will the lender become the owner of my home?
- Can I be forced to move from my home?
- What happens if I want to sell my home?
- What happens if the reverse mortgage loan balance grows to be more than the home value?
- How long will it take to obtain a reverse mortgage?
- How can I spend my proceeds from the reverse mortgage?
- How can I get answers to further questions on reverse mortgages?
Frequently Asked Questions
Q. What are the qualification requirements for a reverse mortgage?
Homeowners must be at least 62 years old at the time the reverse mortgage is completed and the home they wish to use for a reverse mortgage must be their primary residence. Credit scores and income and not considered.
Q. Do I have any out of pocket costs to complete a reverse mortgage?
No; we finance all closing costs into the beginning loan balance. However, you may pay some or all of your closing costs if you choose.
Q. How much money can I borrow?
Reverse mortgage proceeds are determined by factors including borrower ages, property value and current interest rates. Reverse mortgages cannot loan the full value your property at the time you take out the loan. Loan proceeds in the form of immediate cash typically range between 55 to 80% of the property value. Older homeowners with higher property values qualify for the greatest loan proceeds.
Q. How can I receive my reverse mortgage loan proceeds?
You can receive:
- Immediate cash at the time the reverse mortgage is completed.
- A line of credit that you can draw from as you need funds.
- A fixed monthly advance to you or
- Any combination of these payment plans.
Q. Do I have to own my home free and clear to qualify for a reverse mortgage?
No. Proceeds from your reverse mortgage can be used to pay off any existing loans you may have against your home provided there are sufficient proceeds available from the reverse mortgage. Because there are no monthly repayments required with a reverse mortgage, the benefit of paying off your existing mortgage is that you will be giving yourself a raise in income by eliminating your monthly mortgage payments.
Q. Can I pay down or pay off my reverse mortgage loan balance?
Yes. If you choose, you may make payments toward your loan balance at anytime with no penalty. All repayments you choose to make can be re-borrowed at a later date. However, no repayment is required as long as you continue to own and occupy your home.
Q. What if I need to change my payment plan?
You can change your reverse mortgage loan proceeds payment plan as often as you like after the reverse mortgage closes. Our Servicing Department in Seattle can assist you in understanding your options. (A small charge will be assessed for payment plan changes made after your loan is closed)
Once you no longer occupy the home as your permanent residence, the reverse mortgage must be repaid. Most often, the loan is repaid with proceeds from the sale of the home, but this is not a requirement. You or your heirs may pay off the balance owed in any manner you choose including the use of a new traditional mortgage to provide the funds necessary to pay off the reverse mortgage.
Q. Will the lender become the owner of my home?
No. With a reverse mortgage you continue to own your home. The senior homeowner still maintains all the rights and responsibilities of homeownership. You will still be responsible for regular maintenance and repairs, hazard insurance and property tax payments. Oregon seniors who qualify for the Oregon Senior Citizens Property Tax Deferral Program can defer their property taxes after a reverse mortgage is completed.
Q. Can I be forced to move from my home?
No. As long as you comply with the basis requirements of the reverse mortgage, namely take care of property taxes, maintain insurance and keep the home in good repair, you cannot be forced to leave the home. This is true even if the loan balance eventually grows to exceed the value of the home.
Q. What happens if I want to sell my home?
You own the home, so you are free to sell the home at any time. When your home is sold, you will need to pay off the reverse mortgage balance. If you have passed on and your heirs have chosen to sell the home, they will have to pay off the reverse mortgage balance out of the sale proceeds.
Q. What happens if the reverse mortgage loan balance grows to be more than the home value?
You are never required to repay more than the value of the home at the time the reverse mortgage is paid off. Unlike other mortgages, reverse mortgages are called "limited liability" loans because your property is the only source of repayment.
Q. How long will it take to obtain a reverse mortgage?
We typically can complete reverse mortgages in three to four weeks which is considerably faster than any other reverse mortgage lender.
Q. How can I spend my proceeds from the reverse mortgage?
The proceeds from the loan are yours to spend however you see fit. There are no limitations or requirements on how you spend your money. Borrowers often use their proceeds for:
- Travel
- Help fund a grandchild's college education
- Home repair and remodel
- Supplemental income
- Buying a new car
- In home care
- Paying off existing debts
- The options are endless
Q. How can I get answers to further questions on reverse mortgages?
Call Reverse Mortgage Oregon in Portland at 503-526-1331 or toll free at 1-888-271-7840.
