What is a Reverse Mortgage?

A Reverse Mortgage is a special, FHA/HUD, government backed loan that allows you to utilize the equity in your home and receive cash, a *tax-free monthly income and/or a line of credit.

*Consult your personal tax advisor

Back To Top

Who can qualify for a Reverse Mortgage?

To qualify for a Reverse Mortgage you must be a homeowner at least 62 years of age or better, occupying your home as your primary residence, with substantial equity in your home.

Back To Top

Are there any income requirements or credit qualifications?

No, there are no income or credit requirements and no monthly payments to make.

Back To Top

If there are no monthly payments, what are my responsibilities as a Borrower?

The Borrower is required to pay yearly property taxes, provide proper homeowners insurance, maintain the home and notify the lender if you will be away from the property for an extended length of time. (Over 9 months)

Back To Top

What if I already have a current mortgage on my home?

An existing mortgage must be paid off at closing. The proceeds from your Reverse Mortgage can be used for this purpose.

Back To Top

What else can I do with the money?

You may supplement your income, finance home improvements, pay for medical expenses, pay off debt, purchase a new car, travel….The choice is yours!

Back To Top

How much money will I receive?

This is determined by your appraised home value, age of the youngest Borrower (at least 62) and the current interest rate. One of our representatives will be happy to assist you in calculating the maximum money available to you.

Back To Top

What costs are associated with a Reverse Mortgage?

All costs can be financed as part of your initial loan advance, meaning no out of pocket costs to you. Costs typically associated with your loan include the cost of the appraisal, title insurance, loan origination, escrow and recording fees. We will be happy to provide you with a Good Faith Estimate of related costs.

Back To Top

Do I pay taxes on Reverse Mortgage loan proceeds?

Monies received from a Reverse Mortgage, according to the Internal Revenue Service, are considered a loan advance and are not a source of taxable income. It is recommended you consult with your personal tax advisor.

Back To Top

How is interest charged?

The interest on a Reverse Mortgage is adjustable and is tied to readily available market indexes. The initial rate is determined at loan closing and adjusts either monthly or annually. Interest charges do not affect the amount of your monthly check. You are only charged interest on your loan balance, which consists of the cash you received and the financed closing costs.

Back To Top

Can I deduct the interest charged on the loan principal?

When you permanently leave the property and no longer reside in the home, the accrued interest is then deductible once the loan balance and interest is repaid.

Back To Top

When does the Reverse Mortgage need to be paid?

Your Reverse Mortgage becomes due and payable when you permanently leave the home, whether you move, sell or pass away.

Back To Top

What happens then?

Reverse Mortgages are typically repaid from the proceeds of the sale of the home, with any remaining equity staying with the homeowner or heirs.

Back To Top

What if my heirs wish to keep the home?

They may do so by refinancing the home with a conventional loan.

Back To Top

What if there is a remaining spouse in the home?

If a spouse passes away, the surviving spouse continues to receive the full benefits of the Reverse Mortgage, with no repayment until they decide to permanently leave the home.

Back To Top

What if I own more that the house is worth?

All Reverse Mortgages are ‘non-recourse’ loans. The Borrower can never owe more than the value of the home, regardless of the loan balance.

Back To Top

Do I still own my home with a Reverse Mortgage or does the lender take the house?

You absolutely do own your home! You retain full ownership of your home. A Reverse mortgage is merely a loan against the property. The property title remains in the name(s) of the Borrower.

Back To Top

Can a Reverse Mortgage be closed in a Living Trust?

Generally this is acceptable, however, the complete trust documents will need to be reviewed before a determination can be made and an attorney opinion letter obtained from your legal counsel.

Back To Top

What if I have a Land Trust? Can I still qualify for a Reverse Mortgage?

Yes. A copy of the trust will need to be provided along with all related documents and contact numbers.

Back To Top

Will a Reverse Mortgage affect my Social Security, Medicare or pension benefits?

No. Proceeds from a Reverse Mortgage do not affect these benefits.

Back To Top

What is a Counseling Certificate?

This is a free, required counseling session designed to assist you in determining if a Reverse Mortgage is right for you. The session can be done either in person or by phone. At the end of the session you will receive a Certificate of Counseling to provide your lender.

Back To Top

Are their any homes that do not qualify for a Reverse Mortgage?

Yes. Mobile and manufactured homes, not attached to a permanent foundation, rental properties of more than four units, homes on leased land, vacation homes or any other secondary residences do not qualify.

Back To Top

What items will I need to apply?

The following is a list of what items and/or documents you will need to have with you at the time of application:

• A Smile. We love to see our Seniors Happy!
• Original, signed and dated Counseling Certificate
• Photocopy of your Drivers License and Social Security Card. If available, a copy of your Birth Certificate.
• Copy of your most recent Property Tax statement.
• Copy of your Homeowners Declaration page.
• ORIGINAL death certificate of spouse if a widow(er). This is needed if the deceased spouse has not been removed from title.
• Names, addresses, account number and statement from any current mortgage debt.
• If the property is held in a Living Trust, a complete copy of the trust, including all pages and amendments is required, as well as an Attorney Opinion letter. (We will provide the letter to you)
• If in a Land Trust, a complete copy of the trust and the contact information for the Trust holder.
• If Borrower has a Power of Attorney signing, a complete copy of the Power of Attorney documentation is required, and the ORIGINAL will be required at closing so that it can be recorded.

Back To Top

Why should I choose Reverse Mortgages of Illinois?

As a subsidiary of Seattle Mortgage, you can rely on our many years of experience and integrity. Our commitment to customer care and affordable housing have earned the company national recognition as a top lender and is what enables us to offer you unique products, such as the Reverse Mortgage. Your Reverse Mortgage stays with us! We are both your lender and servicing company, which means your Reverse Mortgage will never be sold to another company. We are here to make your experience a pleasant one and serve you for the years to come.

Back To Top

This sounds great! What is the next step?

Please contact Reverse Mortgages of Illinois at 847-540-5024 and our friendly staff will be happy to assist you in your next steps to a rewarding future!

Back To Top