Frequently Asked Questions
Taking a Reverse Mortgage is a big decision. It’s normal for you and your family to have questions and hopefully the answers below can help put you at ease. If you don’t see your question, feel free to call a Genworth Reverse Mortgage Advisor. They’re highly knowledgeable and here to offer impartial advice, not to sway you in any direction. When you’re ready to apply, they’ll work with you every step of the way. Call today at 1.800.218.1415.
Question and answers about Reverse Mortgages:
What is a Reverse Mortgage?
A Reverse Mortgage is a loan that allows you to access a portion of the home equity and convert it into tax-free retirement income. With this type of loan, you maintain the title to your home and no repayment is required until the loan is due. The loan becomes due when the last borrower(s) permanently leave the home. When the loan becomes due, the borrower will never owe more than the appraised value of his or her home.
If no monthly payments are required, how is my Reverse Mortgage paid back?
You or your heirs can sell the home and use the proceeds, use other sources of funding or funds from a new mortgage on the home to pay off the loan balance.
How do I qualify for a Reverse Mortgage?
It's easy. To qualify, you must be age 62 or better and be the titleholder to your home. You don't need any income to qualify but you do need a fair amount of equity in your home.
Does my credit score or income influence my eligibility?
No. There are no credit score or income requirements in order to be approved for the loan. You can even have bad credit, as long as there are no current government liens against your home.
What if I have an existing mortgage?
If you currently have a mortgage, that's okay. However, a portion of the funds you receive from your Reverse Mortgage (or funds from another source) must be used to pay off any existing mortgage you have on the property at closing.
Is my home eligible?
Your home must be a single-family residence in a 1- to 4-unit dwelling, or a HUD-approved condominium; some manufactured housing is eligible, but cooperatives and many mobile homes are not.
Will I still own my home or will I lose it?
You will still own your home and you can stay in it for as long as you wish. You will maintain the title until your home is sold. This program is regulated and insured by the Federal Housing Administration. By law, you can't be forced to sell or move.
Are there property and insurance requirements?
Because you still own your home with a Reverse Mortgage you’re responsible for the general maintenance and upkeep as well as for paying all ongoing property taxes and insurance. But don’t worry. You can pay for these expenses with funds from your Reverse Mortgage.
What types of loans are available?
Most of our loans are Home Equity Conversion Mortgages (HECM). Always ask to see a comparison of various loans so you have a complete understanding of what is available. Your Genworth Reverse Mortgage Advisor can objectively help you decide which of our federally insured products best fit your needs.
How much of my home’s equity can I access with a Reverse Mortgage?
The loan amounts vary based on which reverse mortgage product you choose. Quite simply, the amount you can receive depends on your age, current interest rates, and the appraised value of your home or FHA county lending limits. Generally, the more valuable your home is, the older you are, and the lower the interest, the more you can borrow.
How can I use the money?
The money from your Reverse Mortgage can be used any you choose, from making ends meet, medical expenses (including in-home care), and home improvement to travel, pampering your grandkids and living your retirement dreams. There are no limitations or restrictions.
What costs are involved with a Genworth Reverse Mortgage?
As with any loan, there are closing and other costs, all of which can be paid with the money generated by your reverse mortgage; but there are NO out-of-pocket costs to you.
Will I have to pay any taxes?
No. The IRS considers the funds you receive tax-free.
Will this loan affect my Social Security or Medicare benefits?
HECM Reverse Mortgage payments do not affect your Social Security or Medicare benefits. However, regulations vary for the federal Supplemental Security Income program and for state-administered programs such as Medicaid, Aid for Dependent Children (AFDC), and food stamps. We suggest that you consult a benefits specialist at your local Area Agency on Aging or the local offices for these programs to determine how HECM payments may affect your particular situation.
How will I receive the available funds?
The most common way is to draw from a line of credit to use at your discretion. You can also choose to receive a single lump sum, regular monthly installments, or any combination of these options.
Will my family or estate ever owe more than the value of my home?
No. With a Genworth Reverse Mortgage you’ll never owe more than the appraised value of your home when the loan matures.
What if I want to leave our home to the kids?
It's your home. You can still leave it to your children, or to anyone you choose. When the loan becomes due, your heirs will have to repay the amount owed or the appraised value, whatever is less. You or your heirs always have the option of paying off the entire balance and keeping the home (which can be done by refinancing with a standard mortgage or by using other funds) or by selling the home to pay off the balance. In any case, the amount of the loan can never exceed the value of the home when the loan is due.
Will I incur any penalties if I decide to pay back the loan early?
No. You can pay back the loan at any time without the worry of being penalized.
