Reverse Mortgages — FAQ

Am I qualified for a reverse mortgage if I have an existing loan on my home?
Yes, but the existing loan must be paid off prior to or at the settlement of the reverse mortgage.  Quite often the reverse mortgage is used to refinance an existing loan.

My property is held in a Living Trust. Do I qualify?
Yes, as long as you are the primary trustee and are qualified by age.

To avoid probate, my children and I own the property in joint tenancy.  Do we qualify?
Yes, if the children are age 62 and older and live in the property.  Otherwise, they would need to be taken off title prior to settlement.

Does the IRS consider the monthly advances from the reverse mortgage income?
No. The cash advances are actually loan distributions and are not considered income. The cash advances are tax-free.

Are mobile homes eligible?
Yes. The home must have been built in 1977 or later and have permanent foundation that is approved by FHA.

My spouse is permanently in a nursing home. Can we participate?
Yes. The requirement is only that one owner occupies the property as a principal residence.