You could sell and downsize, or you could sell your home to your children or grandchildren to keep it in the family, perhaps even becoming their renter if you want to continue living in the home. According to the national reverse mortgage lenders association, homeowners aged 62 and older held $7.14 trillion in home equity in the first quarter of 2019. The number marks an all-time high since measurement began in 2000, underscoring how large a source of wealth home equity is for retirement-age adults. By the fiscal year ending in september 2008, the annual volume of hecm loans topped 112,000 representing a 1,300% increase in six years. For the fiscal year ending september 2011, loan volume had contracted in the wake of the financial crisis, but remained at over 73,000 loans that were originated and insured through the hecm program. Lenders disclose estimated closing costs using several standardized documents, including the VA Loans comparison, loan amortization, total annual loan cost , closing cost worksheet, and the good faith estimate .

A reverse mortgage lets you tap into the equity of your home, but includes ongoing responsibilities to maintain the property and pay expenses like taxes and insurance. However, if you uphold the loan obligations listed above, your reverse mortgage will not come due until the last borrower moves out of the home or passes away. When this happens, the home is sold, and the proceeds of the sale are used to pay the loan balance in full. The closing costs and interest rates for home equity loans and helocs also tend to be significantly lower than what you’ll find with a reverse mortgage.

A hecm counselor or a lender can help you compare these types of loans side by side, to see what you’ll get – and what it costs. Do you want a reverse mortgage to pay for home repairs or property taxes? If so, find out if you qualify for any low-cost single purpose loans in your area. Staff at your local area agency on aging may know about the programs in your area.

If the loan balance exceeds the home’s value, the federal housing administration will cover the difference. The amount you can borrow depends on your age, property value, and interest rate. The amount required to repay the loan will never exceed the net sale proceeds of the property. If you’re in default on your reverse mortgage, there are options.

A reverse mortgage allows you to borrow against the equity in your home, meaning you can receive monthly payments from your home's value rather than paying down your loan. A reverse mortgage lets older homeowners tap into their home’s equity for a lump sum payment, periodic payments, or in the form of a line of credit. Under new york law and regulations, the question of whether or not a borrower may be required to escrow property taxes and insurance payments in a set-aside account is determined based on the result of a financial fitness test. If the results of the financial fitness test indicate the need for a set-aside account, a lender is required to establish such an account and ensure timely payment of a borrower’s property taxes and insurance. No, social security, medicare or pension benefits will not be impacted.