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Senior Citizen's Guide to Chicago

Reverse Mortgage Fact Sheet

The fact is: Reverse Mortgages were designed to help seniors maintain their current homeowner status and access their home’s equity if needed.

A Reverse Mortgage can provide seniors with an additional financial source (in this case, their home) to assist with paying for services that help them maintain a “good quality of life”. A reverse mortgage can be used to secure services such as: Home Care or “life assistance” services (meal preparation, medical reminders, laundry, light housekeeping, errands, shopping, and transportation).

Reverse Mortgage rules and guidelines are overseen by HUD (Department of Housing and Urban Development), FHA (Federal Housing Administration), and by the GAO (Government Accountability office). One of the most important features of a reverse mortgage is that once a senior gets a Reverse Mortgage the senior will never be in a negative equity position if they ever decide to sell their home. If the property value decreases and the senior sells the property, the only amount due to the reverse mortgage lender is the current market value at the time of the sale. In addition ALL seniors that are interested in a reverse mortgage have to complete mandatory loan counseling to ensure that the senior understands the Reverse Mortgage process before they enter into a loan agreement.

Get the Facts About Reverse Mortgages:

Qualifications for Reverse Mortgages:

Four factors that determine how loan draw amounts are calculated:

  1. Age
  2. Current interest rate
  3. Appraised value of home
  4. Balance owed on home

Proceeds from a reverse mortgage are distributed as follows:

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