What is a Reverse Mortgage?

A Reverse Mortgage (or Home Equity Conversion Mortgage) is a Federal Housing Administration (FHA) insured loan available to homeowners age 62 and above that uses your home’s equity as the source of funds. The loan amount is a percentage of your home’s value determined by the age of the youngest homeowner. The loan does not have to be repaid until the last homeowner permanently moves out of the property. At that time, your estate has approximately 12 months to repay the balance of the mortgage, or sell your home to pay off the balance. All remaining equity is inherited by your estate. FHA insured means your estate is not liable if your home sells for less than the balance of the Reverse Mortgage.

How do you determine the amount of cash I will be paid?

The amount you can obtain depends on several factors, including your age, the type of reverse mortgage you select, current interest rates, the appraised value of your home and FHA’s lending limits for your area. In general, the older you are, the more equity in your home, and the less you owe on it, the more money you can receive.

Are there any limits on how I use the money I receive from a Reverse?

You can use the money for anything you choose, such as daily living expenses, home improvements, healthcare expenses, paying off existing debts, purchasing a new home, buying a new car, traveling, gifts to family or simply enhancing your retirement years.  The possibilities are virtually endless.


These materials are not from HUD or FHA and were not approved by HUD or a government agency.

About Two Bald Mortgage Guys

Ken Blanchard, one of the country’s premier business leadership authors, says in his latest book, “To keep customers today, you can’t be content to merely satisfy them; you have to give them legendary service and create ‘raving fans’ – customers who are so excited about the way you treat them that they tell stories about you.” In everything we do, this is what we envision. We see people such as yourself being so enthused with the process and service we provide that you will become a raving fan for us, telling stories to people of what you just experienced.


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