Frequently Asked Questions About Reverse Mortgages
How much does a reverse mortgage cost?
This depends on the loan you take out, the interest rate, and the lender’s fees. It also depends on how long you have the loan for. The longer the loan lasts, the more interest it accrues, hence costing you more. HomeEquity Bank and CHIP reverse mortgage offers reverse mortgages, which are secured loans against the appraised value of your home, allowing you to access your home equity.
What kind of home can I get a reverse mortgage on?
Reverse mortgages can be taken out on any privately owned home, as long as it meets the lender’s criteria (usually a minimum value of $150,000), and as long as it is the borrower’s primary residence. If the property has multiple owners, then all of the owners must meet the lender’s requirements.
How much can I borrow with a reverse mortgage?
The amount you can borrow depends on the value of your home. With a CHIP reverse mortgage or HomeEquity Bank reverse mortgage, the upper limit is 55% of the home’s value.
Who owns my home when I take out a reverse mortgage?
You still own your home when you take out a reverse mortgage; just as with a traditional mortgage, the loan does not impact your ownership. The loan is simply secured against the property.
Will a reverse mortgage affect my benefits?
No, they do not affect benefits, as income from a reverse mortgage is tax free. It’s worth noting that a reverse mortgage is a loan, and as such, it is not considered income.
If my spouse dies, what happens to our reverse mortgage?
If you own your home with your spouse, the reverse mortgage is maintained after they pass away. For the mortgage to close, both spouses need to pass away or vacate the home.
How will a reverse mortgage affect my children’s inheritance?
This depends on how the mortgage is closed. If you close it or repay it prior to your death, then it will have no more effect than repaying any type of loan. If the reverse mortgage is automatically closed after you pass away, then your estate repays the loan. This naturally reduces the sum of money left to your beneficiaries, but rest assured: if property prices fall, they will not be stuck paying the cost of your loan out of pocket. With HomeEquity Bank reverse mortgage or CHIP reverse mortgage, your home equity can be a valuable resource for your retirement planning.
How does a reverse mortgage work?
A reverse mortgage allows you to access the equity in your home, giving you more financial flexibility during your retirement years. With a CHIP reverse mortgage or Equitable Bank reverse mortgage, you can borrow money against the appraised value of your home. The amount of the loan is based on your age, the appraised value of your home, and the lender’s fees.
The loan does not have to be repaid until you sell your home, move out, or pass away. At that time, the loan, plus interest and any fees, must be repaid. If you have a CHIP reverse mortgage or HomeEquity reverse mortgage, you or your heirs can choose to repay the loan at any time without penalty.
Reverse mortgage funds allow you to convert your home equity into cash, which can be used to pay for medical expenses, home renovations, travel, or any other expenses you may have during retirement. With a CHIP reverse mortgage or Equitable Bank reverse mortgage, you can access up to 55% of your home’s value. You still own your home, and the loan is simply secured against the property.