Here are some key details about reverse mortgages:

1. Eligibility Criteria:
   • Homeowners must be at least 62 years old.
   • The home must be the primary residence.
   • The homeowner should have sufficient equity in the home.
2. Loan Types:
   • Home Equity Conversion Mortgage (HECM): Insured by the Federal Housing Administration (FHA), this is the most common type of reverse mortgage.
   • Proprietary Reverse Mortgage: Offered by private lenders and not backed by the government. It may have different eligibility requirements.
3. Loan Amount:
   • The loan amount is based on factors such as age, home value, current interest rates, and the type of reverse mortgage.
4. Repayment:
   • No monthly mortgage payments are required.
   • The loan is typically repaid when the homeowner sells the home, moves out, or passes away.
   • The repayment amount is the loan amount plus accrued interest and fees.
5. Interest Rates:
   • Interest rates can be fixed or adjustable.
   • Interest accrues on the outstanding loan balance over time.
6. Fees:
   • Closing costs may include origination fees, appraisal fees, mortgage insurance premiums, and other charges.
   • Some fees can be financed into the loan.
7. Homeownership Responsibilities:
   • Homeowners must continue to pay property taxes, homeowners insurance, and maintain the property.
8. Loan Disbursement Options:
   • Lump Sum: Receive a one-time payment.
   • Monthly Payments: Receive a steady stream of income.
   • Line of Credit: Access funds as needed.
   • Combination: Choose a combination of the above options.
9. Impact on Heirs:
   • Heirs have the option to repay the loan and keep the home or sell the home to repay the loan.
   • If the home is sold, any remaining equity goes to the homeowner or heirs.
10. Counseling Requirement:
    • Homeowners are required to undergo counseling with a HUD-approved counselor before obtaining a reverse mortgage.
11. Protection Against Negative Equity:
    • HECM loans include a provision that ensures the homeowner (or their heirs) will not owe more than the home’s appraised value.

It’s crucial for individuals considering a reverse mortgage to thoroughly understand the terms, benefits, and potential risks. Consulting with a qualified financial advisor and attending mandatory counseling sessions is highly recommended to make informed decisions based on individual circumstances.