What Is A Reversible Mortgage

A Reversible Mortgage is a special type of loan that allows a homeowner to modify a portion of the equity in their home into cash they can access. The funds are not taxable to the homeowner and normally don’t interfere with eligibility for Social Security or Medicare benefits. (However, in the federal Supplemental Security Income program, beneficiaries must keep their liquid resources under certain limits.) The customer retains title to the home as well as right to any recognition in home value when the loan terminates after it is paid off. The loan remains in force until the last titleholder dies, permanently leaves the home or sells the property, the borrower can't be forced to sell or move by the lender. The loan may be repaid at any time. But unlike a traditional home equity loan or second mortgage, no monthly payments are required. Instead of putting further pressure on an already extended budget, a Reverse Mortgage can free a senior homeowner of monthly debt obligations. Most Reverse Mortgages today are Home Equity Conversion Mortgages (HECMs) and are FHA-insured and guaranteed. Because HECMs are subject to FHA lending limits, proprietary products have also been advanced to help homeowners with properties in excess of the FHA lending limits. what is a reversible mortgage