How Does a Reverse Mortgage Work?
A reverse mortgage allows homeowners who are 62 years or older to access a portion of the equity in their homes without having a monthly mortgage loan payment.
- No loan repayment is required as long as the borrower owns and lives in the home.*
- There are limited income, asset, and credit requirements
- The homeowner retains title and ownership of the home
- Cash advances can be used for any purpose
What can I use the money for?
- Pay off current mortgage or debts
- Property taxes/ home insurance
- Home repairs
- Everyday living expenses
- Retirement Planning
- Medical expenses or in-home care
How can I qualify?
- Any homeowner who is 62 years or older
- You must be living in the home as your primary residence
How much money can I get?
The amount you can get depends on:
- Youngest borrower’s age**
- The home value
- Current interest rates
- The HUD loan limit in your area
How is it paid to me?
You can choose how to receive your money.
You can receive it:
- As a Lump Sum at the closing of the loan
- As a Monthly Cash Advance
- As a Line of Credit
Any combination of the above three options
When do I pay it back?
When the home is sold or when the last surviving spouse or borrower dies or moves away for 12 months in a row.
Are Reverse Mortgages Safe?
- Reverse mortgages are insured by the U.S. Dept. of HUD
- Payments to borrowers are guaranteed by the U.S. government
- They are available through HUD Approved lenders
- Independent HUD counseling is required prior to application
- Does not affect Social Security or Medicare benefits***.
How do I apply for a Reverse Mortgage?
First you must obtain a counseling certificate from a HUD-approved counseling agency (we can supply you with a list of national and local agencies from which you can choose). After receiving your counseling certificate, you can make an application with a 1st Nations Reverse Mortgage Specialist. Under normal circumstances, the entire process should take approximately 30 – 45 days.
Who do I contact first?
If you would like more information about reverse mortgages, or if you would like an appointment to make an application call: (800) 720-7003.
* Borrower must continue to pay property taxes, insurance, applicable maintenance and association fees, and maintain the property. Failure to do so may result in foreclosure.
** Or the age of an eligible non-borrowing spouse.
*** SSI and Medicaid benefits may be affected. Get professional advice.