Safety of the Program:  The reverse mortgage is sponsored, insured and vigilantly regulated by the US Department of Housing and Urban Development.  The rules that govern this loan are enforced by very strict government regulation to protect seniors from any type of lender abuse.  As an example, each borrower is required to receive counseling from a HUD approved counseling agency to insure the fact that all borrowers receive accurate, objective, 3rd party information about this loan.

Equity Determines Loan Size: The amount of equity you have in your home will to a large extent determine the size of the reverse mortgage loan for which you are eligible.   Generally, the more equity you have in your home, the higher the loan amount for which you will qualify.

Retaining Ownership: Reverse mortgages operate like a regular mortgage.  Obtaining a reverse mortgage does not mean that you are forfeiting your home to the US Government in exchange for a loan. You are NOT selling your home or giving up title to your home. It simply means you are using your home as collateral for a loan which will be repaid by you or your heirs at a future date.

The Application Process is Easy: Since there is no verification of income, credit, assets or health, the reverse mortgage application process is extremely streamlined.  The borrower needs to sign the application forms, attend a phone counseling session, and allow an appraiser to inspect the property.  The rest is handled by the mortgage company.   In most cases you will have your money in 4 to 5 weeks from start to finish.

Spending the Money: There are absolutely no restrictions on how you spend the money which means that you can spend the money in any way your heart desires.  Alternatively, you may leave the reverse mortgage proceeds in the line of credit and draw on them whenever you wish.  Many reverse mortgage borrowers have used the money to supplement their income, pay off an existing mortgage, fund retirement and long term care expenses, buy a new car, take a vacation, or for any other personal needs or desires.

Payback: Three events can trigger the requirement to pay back the loan.  When the house ceases to be your permanent residence because you move, sell the home or die, the loan has to be repaid.  If at the repayment time the house is worth less than the loan balance, the government will pay to the lender the difference between value of the home and the loan balance.  If the value of the home is greater than the loan balance, the remaining home value goes to your estate.