Reverse Mortgage

Discover what a reverse mortgage is, when it makes sense, and when you should walk away. Also learn about alternatives like forward mortgages, how they work and which is best for you.
Frequently Asked Questions
  • Can I lose my home with a reverse mortgage?

    Yes. Borrowers can lose their home to foreclosure with a reverse mortgage for several reasons. The most common source of foreclosures on a home with a reverse mortgage is failure to keep the property in good repair or to pay property taxes.

  • Why can’t reverse mortgages be transferred?

    Reverse mortgages are designed to reduce risks to the insurer. If, for example,  the borrower receives more money from the loan than their home is worth when it is eventually sold, that would leave the FHA on the hook for the difference.

  • How does divorce affect a reverse mortgage?

    When a divorcing couple has a reverse mortgage debt, they'll need to decide whether one of them will stay in the home or whether they'll sell it. The spouse who retains the home and is listed as a co-borrower on the reverse mortgage won't pay anything toward it as long as they live in the home.

  • Can I change my reverse mortgage payment plan?

    Yes, during your loan term, you can change the way you receive your reverse mortgage proceeds without refinancing your loan, as long as you are switching among the adjustable rate plans. You cannot switch between an adjustable- and fixed-rate plan after closing.

  • Can I run out of equity on my reverse mortgage?

    Yes, it is possible to run out of equity. The CFPB warns that younger retirees with longer life expectancies have a greater chance of using up all of their home equity with a reverse mortgage. Ideally, you'll have a plan for how to use the money before you get a reverse mortgage.

  • Can I hire my own appraiser?

    When you apply for a reverse mortgage, the lender will arrange for a professional appraisal. You are free to hire your own appraiser, but the verdict of the lender’s appraiser will be the one that counts for obtaining a reverse mortgage and determining the amount.

Key Terms

Explore Reverse Mortgage

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