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Home Safety Tips for Senior Citizens - Quicken Loans Zing BlogReverse mortgages help provide financial stability for seniors age 62 and over. Beginning April 27, applicants can expect some changes in the process.

While these changes are ultimately for the protection of clients, there will be some additional steps along your path to a reverse mortgage.

What’s Changing?

When you get a reverse mortgage, you still own your home despite receiving payments from the lender. This means that although you may not have a monthly mortgage payment, you’re still responsible for things like property taxes and hazard insurance.

Because the Federal Housing Administration insures reverse mortgages (also known as home equity conversion mortgages), they want to make sure that people have enough cash flow to pay tax and insurance obligations without going into default.

Starting April 27, lenders will begin doing a financial assessment. This means pulling credit reports and doing income analysis to make sure applicants have demonstrated a pattern of financial responsibility and have the resources available to meet these obligations. If not, qualification is still possible, but money may have to be set aside by the lender to make the payments.


Reverse mortgages allow you to convert the equity you already have in your home to cash. A home equity line of credit does the same thing, but a reverse mortgage has an important advantage: You don’t make any payments during the term of the loan.

Unlike a traditional mortgage where you make payments every month, in this case the mortgage company pays you. The amount of money you can get depends on your estimated home value and your age. If you have a mortgage, part of the loan goes to paying off your current monthly mortgage payment and you get to keep the rest. There are several ways you can take your payment.

You’ve been around the block, so you know no one’s giving you free money, but the loan doesn’t come due until you either sell your house, no longer live there or pass away. When that time comes, your heirs have options.

They can sell the home to pay off the mortgage. (If your home is worth more than what is owed, your heirs get to keep the proceeds.)

If they wish to stay in the home, they can buy it for 95% of the appraised value or pay off the loan (whichever is less). Alternatively, they can refinance it to a traditional mortgage.

It’s important to note that a reverse mortgage is a non-recourse loan. This means that under no circumstance will your next of kin be responsible for more than the home’s current worth.

Think a reverse mortgage might be right for you? Our friends over at One Reverse Mortgage can help. You can also talk to them at (888) 980-1543.

If you have any questions, you can ask them in the comments.

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This Post Has 3 Comments

    1. We don’t do reverse mortgages, but our friends over at One Reverse Mortgage do. They would be happy to go over this and any other questions you have if you give them a call at (800) 401-8114. You can also check out their website, linked above. Hope this helps!

      Kevin Graham

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