No, you do. A reverse mortgage is a lien just like a traditional mortgage.

2. Do I get taxed on the money I receive from my reverse mortgage?

The equity in your home is considered your money and not additional income. All the funds from a reverse mortgage are tax free.

3. What costs are associated with a reverse mortgage?

The costs of a "forward" loan are very similar to a reverse loan. For example, an origination fee is paid to the broker/lender, a MIP (mortgage insurance premium) is paid to HUD on the HECM loans, an appraisal fee, a flood certificate fee, a doc prep fee, title and escrow fees, and other standard closing costs.

4. How do I qualify for a reverse mortgage?

To become eligible for a reverse mortgage, you must be at least 62 years old and own your own home. You must have enough equity in the house to pay off outstanding mortgage balances. Your home is also required to be occupied by you as your principal residence.

5. How much money can I get?

The amount of money that a lender will loan depends upon how old you are at the time of closing, how much your house is worth, the total amount of liens, and interest rates. The type of reverse mortgage product and the payment options can also affect the amount of money you will receive.

6. How do I receive my money?

There are several different options to choose from. You can take the money in a lump sum, set up a line of credit, monthly payments, or a combination of all three.

7. Is it required that I receive counseling before getting a reverse mortgage?

Yes. Counseling is required to protect seniors from receiving incorrect information about reverse mortgages. The lender must be in receipt of the counseling certificate before they can close the loan. To locate a reverse mortgage counselor near you, contact your loan officer.

8. Do I have to pay any fees to the reverse mortgage lender during the course of my loan?

A reverse mortgage was created so seniors don't have to pay fees during the course of the loan, however, there is a monthly servicing fee, which is deducted from the service set aside account for every month that you obtain the loan.

9. Am I responsible for paying my homeowners insurance and property taxes?

Property taxes and homeowners insurance must be paid current at all times. If you choose, and if loan proceeds are available, the lender can impound your taxes and insurance and pay them for you when they become due.

10. Does my house have to be in prime condition in order for me to receive a reverse mortgage?

An appraiser will appraise the house following FHA guidelines or the lender's guidelines depending upon the reverse mortgage program. If the house needs to be repaired, the lender may require you to fix it prior to closing. A repair set aside will be issued, if they allow you to repair the home after closing.

11. What is a repair set aside?

If repair work is done after the close of escrow, the lender will hold 1 1/2 times the amount of money it costs to repair the item. Once the work has been completed, a final bill will be submitted to the lender, and they will disburse payments to the appropriate parties.

12. Am I limited as to how I can use the money I receive from a reverse mortgage?

You can choose to use your money however you like; it is your money. Borrowers have used a reverse mortgage to go on vacation, supplement retirement income, home modifications, healthcare, education for loved ones, new car and the list goes on.