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Module 5
Life as a Homeowner
Benefits of Home Ownership
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Reverse Mortgages: Basics and Benefits

For Those Who Are 62+ Years of AgeReverse mortgages can be a simple way for homeowners who are at least 62 years of age to access the available equity in their homes. This mortgage product enables you to remain in your home and provides you with an additional source of funds. Rather than paying a monthly home loan payment to the lender, you will receive funds from the lender. Depending upon the reverse mortgage product you choose, there are different options for how you elect to receive the loan proceeds (for example: a lump sum; fixed payments every month; as a line of credit; etc.).

Key features of reverse mortgages include:
  • No income or health requirements

  • Minimal credit verification requirements

  • Limited paperwork

  • No monthly home loan payments

  • Loan proceeds may be tax-free. Consult a tax advisor for more information.

  • Loan proceeds do not affect Medicare or Social Security

  • Supplemental Security Income (SSI) and/or Medicaid/MediCal are usually not affected. Consult your local senior services agency for more information.

  • Repayment is not due until the last borrower sells the home or permanently leaves the home.

  • Reverse mortgages are “non-recourse,” which means that you, your heirs or your estate will not owe more than the appraised value of the home at the time repayment is due – even if the loan balance exceeds the value of your home.

  • The title to your home stays in your name. A reverse mortgage is only a lien against the property just like a standard home loan.


Typical Uses of Reverse Mortgage Proceeds

A Monthly Source of FundsBecause there are no restrictions on the use of funds received after you have paid off any other home loan debt you may currently have on your home, reverse mortgages can offer you a monthly source of funds to help provide you more choices, financial control and flexibility in retirement years. Common uses for such funds include:
  • Paying for everyday expenses

  • Making home repairs and improvements

  • Covering medical expenses

  • Purchasing long-term care insurance

  • Establishing trusts

  • Helping to financially support family members (such as funding grandchildren’s college tuition)

  • Paying off loans or bills

  • Maintaining or improving your quality of life

For More Information
For more information on reverse mortgages, please click here or visit Countrywide Reverse Mortgage. 

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