How Reverse Mortgage Work

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Reverse mortgages are different from regular home mortgages in two important respects: To qualify for most loans, the lender checks your income to see how much you can afford to pay back each month. But with a reverse mortgage, you don’t have to make monthly repayments.

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Since you don’t make a payment on a reverse mortgage, there is no escrow account set up to pay your normal housing-related expenses. There is a requirement for you to show creditworthiness. The approval process for a reverse mortgage is similar to applying for any other type of mortgage.

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Reverse mortgages work in the opposite direction. The amount you borrow is open-ended and you’re not required to make payments on the balance (as long as you meet program obligations). remember, "HECM" stands for home equity conversion mortgage .

You may be interested in a reverse mortgage but have fears about what will happen to your house. Maybe you are wondering if a reverse mortgage would work.

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If you are retired or nearing retirement, you have probably asked yourself, “what is a reverse mortgage and how does it work?” Reverse mortgages can be confusing.

Most homeowners have heard of reverse mortgages, but there is still a lot of confusion surrounding them. They allow a homeowner to borrow based on his or her age and the amount of equity that has been.

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Reverse Mortgage Eligibility. To be eligible for a reverse mortgage loan, the FHA requires the youngest borrower on title to be 62 years or older. Borrowers must also meet financial eligibility criteria as established by HUD. If there is an existing mortgage on the home, it must be paid off with the proceeds from the reverse mortgage loan.