in New York
What Is A Reverse Mortgage?
Reverse mortgages are loans that allow homeowners to borrow money using their home as collateral. Designed for those 62 years and older, they permit homeowners to withdraw a portion of their equity from their homes all tax-free.
This equity won’t have to be repaid until the owners leave the home and can be converted into one of the following or a combination of the three:
- A large upfront lump-sum payment.
- Equal monthly payments (like social security).
- A line of credit that can be drawn upon as needed.
Unlike regular mortgages, no monthly payments are required, ever. When you take a reverse mortgage loan, the title to your home remains in your name and you will need to continue to pay property taxes and homeowners insurance. Additionally, you will have to keep your house in good condition and use it as your primary residence.
Traditionally, when the borrower sells the house, permanently moves, or passes away, the homeowners or their heirs will repay the loan by selling the property within one year of a liquidating event.
Reverse Mortgage Requirements
To be eligible, the primary homeowner must be 62 or older and comply with these requirements:
They must live in the property for the majority of the year.
The borrower must be financially capable to continue making payments on homeowners insurance, property taxes and homeowner association fees.
They must participate in an informative counseling session provided by a U.S. Department of Housing and Urban Development approved reverse mortgage counselor.