CHIP Reverse Mortgage FAQ's
What if the homeowner has an existing mortgage?
Many of our clients use a reverse mortgage to pay off their existing mortgage and debts, freeing up cash flow for other things.
What makes a Reverse Mortgage different from HELOC's (Home Equity Lines of Credit)?
HELOCs are a good short-term borrowing option for people who can pay the interest and loan in the near future. However, HELOCs are callable loans and there exists significant risk of non-renewal or cancellation.
Will the homeowner owe more than the house is worth?
The homeowner keeps all the equity remaining in the home. In our many years of experience, over 99% of homeowners have money left over when their loan is repaid. The equity remaining depends on the amount borrowed, the value of the home, and the amount of time that’s passed since the reverse mortgage was taken out.
What fees are associated with a Reverse Mortgage
There are one time fees to arrange a reverse mortgage such as an appraisal fee, fee for independent legal advice as well as our fee for administration, title insurance, and registration – many of these are common with a conventional mortgage. With the exception of the appraisal fee, these fees are paid for with the funding dollars.
Should a Reverse Mortgage be considered as a loan of last resort?
No. Many financial professionals recommend a reverse mortgage to customers who would prefer to age at home, who want to reduce their monthly mortgage servicing costs, and want to supplement their monthly income with tax free funds.
How old do you have to be to qualify for a Reverse Mortgage?
Both you and your spouse need to be 55 years of age or older to qualify
Does the bank own my home if I get a Reverse Mortgage?
No. The title of the property remains in the homeowners’ name the entire time. You don't pay the bank, a reverse mortgage pays you. It’s that simple. You always maintain ownership of your home and you’ll never have to move or sell for as long as you or your spouse lives in the home.