What Is a Reverse Mortgage?
A reverse mortgage allows eligible homeowners to turn a portion of their home equity into funds they can use during retirement, without required monthly mortgage payments. The loan balance grows as interest and fees accrue, and repayment is generally due when the home is sold, the borrower permanently moves out, or other repayment conditions are triggered.
Make Your Home Equity Part of Your Retirement Plan
Your home may be one of your most valuable assets. A reverse mortgage could help you access some of that equity for everyday expenses, healthcare costs, or other retirement needs while continuing to live in your home.
- No required monthly mortgage payments while loan conditions are met.
- Continue paying property taxes, homeowners insurance, and applicable property charges.
- Maintain the property and use it as your primary residence.
- Interest and fees accrue, increasing the loan balance over time.
- Optional payments may help reduce the amount owed over time.
A reverse mortgage isn't the right choice for every homeowner. Your retirement plans, financial needs, and long-term housing goals all matter. These questions can help you decide whether it's worth exploring.
- Do I plan to stay in my current home for the foreseeable future?
- How much equity have I built in my home?
- Could access to my home equity help cover retirement expenses?
- Can I continue paying property taxes, insurance, and home maintenance costs?
- How might a reverse mortgage affect my future finances and the equity I leave behind?
- Have I explored other ways to meet my financial needs?
Ways to Use Your Home Equity
Retirement doesn't look the same for everyone. Depending on your financial needs and the reverse mortgage options available to you, accessing your home equity could help cover expenses such as:
- Healthcare costs and unexpected expenses
- Everyday living expenses during retirement
- Home repairs and improvements
- Paying off existing debt
- Helping with family expenses
- Pursuing personal interests or projects
A reverse mortgage is still a loan, so it's important to understand the costs, repayment requirements, and long-term impact on your home equity.
We're here to help you understand your options. Complete the form, and a Mortgage Loan Officer can contact you to answer your questions and explain how a reverse mortgage works.
Reverse Mortgage - AACU Reverse Mortgage FAQs
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- Explore Home Loan Options
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Reverse mortgage loan programs are not controlled by AACU. Reverse mortgage loan programs are provided by Finance of America Reverse LLC. Prices, guidelines and minimum requirements are subject to change without notice. Some products may not be available in all states. Subject to review of credit and/or collateral; not all applicants will qualify for financing. It is important to make an informed decision when selecting and using a loan product; make sure to compare loan types when making a financing decision.
When the loan is due and payable, some or all of the equity in the property that is the subject of the reverse mortgage no longer belongs to borrowers, who may need to sell the home or otherwise repay the loan with interest from other proceeds. The lender may charge an origination fee, mortgage insurance premium, closing costs, and servicing fees (added to the balance of the loan). The balance of the loan grows over time and the lender charges interest on the balance. Borrowers are responsible for paying property taxes, homeowner's insurance, maintenance, and related taxes (which may be substantial). We do not establish an escrow account for disbursements of these payments. A set-aside account can be set up to pay taxes and insurance and may be required in some cases. Borrowers must occupy the home as their primary residence and pay for ongoing maintenance; otherwise, the loan becomes due and payable. The non-borrowing surviving spouse dies, sells the home, permanently moves out, defaults on taxes, insurance payments, or maintenance, or does not otherwise comply with the loan terms. Interest is not tax-deductible until the loan is partially or fully repaid.
The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the borrower does not meet these loan obligations, then the loan will need to be repaid. Otherwise, the loan must be repaid when the last borrower passes away or sells the home.
Restrictions and requirements apply. Ask a mortgage loan officer for details. Membership requirements apply, hundreds of ways to join. Subject to approval.