Home Equity Conversion Mortgage FAQs

The loan proceeds you receive from a reverse mortgage are usually tax free.* You are not required to pay monthly mortgage payments, including principal and interest. However, since you hold the title to your home, you are still responsible for property taxes, insurance, utilities, fuel, maintenance, and other home-related expenses. NOTE: This is not tax [...]

Once the last surviving borrower no longer resides in the home as his/her primary residence, the loan becomes due and you or your estate is responsible for repayment of the money you received from the reverse mortgage, plus interest and other fees as agreed upon in the beginning. Any remaining equity belongs to either you [...]

The fees and cost of a reverse mortgage are based on a number of items. For example, an origination fee is paid to the broker/lender, a MIP (mortgage insurance premium) is paid to HUD on the Home Equity Conversion Mortgage (HECM), an appraisal fee, a flood certification fee, a doc prep fee, title and settlement [...]

The upfront Mortgage Insurance Premiums (MIP) are either 2.5% or .5% depending on how much of the Principal Limit (amount you can borrow) you use in the first year. If your total mandatory obligation payoffs (existing mortgage payoff, tax liens, closing costs, upfront mortgage insurance premium) exceed 60% of the Principal Limit your upfront MIP [...]

Prior to applying for the loan, it is required that you are made aware of the terms and conditions of the loan through sources provided by HUD, and to protect you from receiving incorrect information. The lender must be in receipt of the counseling certificate before they can close the loan. Contact the Housing Counseling [...]

Reverse mortgages have become more popular because they allow the borrower to receive loan proceeds that do not require immediate repayment as long as: you remain in your home as your primary residence, do not sell your home, at least one borrower lives in the home, you meet the basic income and credit standards, and [...]

A reverse mortgage was created so borrowers don’t have to pay most fees during the course of the loan. Typical upfront costs are for the appraisal and HUD-approved reverse mortgage counseling (some agencies waive counseling fees at their discretion). However, monthly FHA mortgage insurance must be paid, and there may be a monthly servicing fee [...]

HUD advises against using any service that charges a fee (except required HECM counseling) or any service that requests a lender referral fee, to obtain a reverse mortgage. HUD provides this information free of charge and can direct you to HUD-approved housing agencies that offer approved reverse mortgage counseling or additional services that are free [...]