1. What is a Connecticut reverse mortgage?

2. Is the home still titled to me if I take out a reverse mortgage?

3. If there are no monthly payments on a reverse mortgage, then how do I pay back the loan?

4. What if the principal and interest amount exceeds the value of my home when the mortgage becomes due?

5. What will a Connecticut reverse mortgage cost me?

6. How will I receive the loan proceeds from my reverse mortgage?

7. What are some common uses of a reverse mortgage?

8. Will the income from a reverse mortgage affect my Social Security and Medicare?

9. What kind of income taxes do I pay on my reverse mortgage loan disbursements?

10. How is the interest rate on my reverse mortgage determined?

11. What is the purpose of the required counseling during the reverse mortgage process?

12. How is my loan amount determined?

13. Who will service and regulate my reverse mortgage?

A reverse mortgage is a type of home loan for home owners over the age of 62 that borrows against the equity in your home. With this loan the borrower will never incur a monthly payment.

Ownership of your Connecticut home will remain in your name and you will never be forced to leave it.

The loan is repaid when you decide to sell or vacate your home for any reason. At this time the principal on the loan, plus any accrued interest or fees will be paid from the proceeds of the sale of your home.

With a reverse mortgage you will never owe more than your home is worth. When you sign up for this loan you pay a mortgage insurance premium. In addition there is a monthly insurance payment that is a small percentage of the principal balance which is also financed into the loan. This insurance makes sure that you or your heirs will never have to take money out of your pocket to pay off a mortgage balance that exceeds your home value.

Virtually all costs, fees, and interest are financed within the reverse mortgage. This means you can get access to this cash without any out of pocket costs ever.

There are three different loan payment options in a reverse mortgage. You as the borrower have the option of taking the money in a lump sum, as monthly payments, or as a line of credit. In addition to this you can take any combination of these plans, and can change them at any time.

For the most part all reverse mortgage programs offer all payment options. However, there are a few guidelines with certain programs.

Reverse mortgages are often used to:

• Pay for any excessive medical or health bills
• Finance the purchase of a second home or current home improvement or repair
• Payoff your existing mortgage
• Settle other types of debt (e.g. credit card)
• Property Taxes or other monthly expenses
• Purchase of Annuity or life insurance
• Additional monthly revenue stream

Since the reverse mortgage is a home equity loan and not income it does not affect social security or Medicare.

In certain circumstances your reverse mortgage may affect public benefit programs such as Supplemental Security Income (SSI) and Medicaid.

Because the reverse mortgage is a loan based on your equity, the IRS does not consider it income and all loan funds are tax free.

The interest rate on reverse mortgages is based upon the 10 year treasury. This rate will help determine the amount of money you qualify for with your reverse mortgage.

Reverse mortgages were designed to help senior citizens stay in their home for as long as they would like. However, since a reverse mortgage is not the right option for everyone it is important that all borrowers seek the counsel of a disinterested third party.

You loan amount will be based on your age, the value of your home, and current interest rates. In addition to this each different program has different lending limits and fees that may affect the amount available to borrow.

Reverse mortgages were developed by the U.S. Government and are regulated by the Federal Housing Administration (FHA) and the Department of Housing and Urban Development (HUD).

Learn More About

Reverse Mortgage

Reverse Mortgage Benefits

Things to Know

Questions and Answers

Download the Guide to Reverse Mortgages

View the Reverse Mortgage Presentation