Reverse Mortgages: What You Need to Know

Reverse Mortgage

SouthFork Funding - Your Home, Your Equity, Your Future

Your Home. Your Equity.
Your Future.

Eliminate monthly mortgage payments and gain peace of mind. If you're 62+ with significant home equity, a reverse mortgage lets you stay in your home while covering taxes, insurance, and maintenance.

Understanding Reverse Mortgage

What is a reverse mortgage?

A reverse mortgage is a loan that allows homeowners aged 62 or older to convert part of their home equity into cash. Unlike a traditional mortgage, you don’t make monthly payments; instead, the loan is repaid when you sell the home, move out, or pass away. You must continue paying property taxes, homeowner’s insurance, and maintenance costs.

Is reverse mortgage perfect for me?

You may be a good candidate for a reverse mortgage if:

✔️ You’re 62 or older and own your home outright or have significant equity.
✔️ You plan to stay in your home long-term.
✔️ You can afford property taxes, homeowner’s insurance, and maintenance costs.
✔️ You need additional income for living expenses, medical costs, or home improvements.
✔️ You don’t mind reducing your home’s equity, which may impact inheritance for heirs.

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Frequently Asked Questions

Reverse Mortgage FAQs
A reverse mortgage allows homeowners 62+ to convert home equity into cash without monthly mortgage payments. The loan is repaid when the home is sold, vacated, or the borrower passes away.
Homeowners must be at least 62 years old, own their home outright or have significant equity, and continue paying property taxes, insurance, and maintenance.
Yes, you retain homeownership. However, you must meet loan obligations like paying property taxes, insurance, and maintenance.
The loan is repaid when you sell your home, move out, or pass away. The home is typically sold to cover the loan balance, with any remaining equity going to your heirs.
Yes, heirs can inherit the home, but they must repay the loan balance, either by selling the home or refinancing the loan.
The amount depends on your home's value, your age, current interest rates, and the loan type. Generally, older homeowners with higher home values and lower mortgage balances can access more funds.
No, the funds from a reverse mortgage are considered loan proceeds, not income, so they are not subject to income tax.
Yes, if you fail to meet loan obligations, such as paying property taxes, homeowner’s insurance, or maintaining the home, the lender may foreclose.
Reverse mortgages are non-recourse loans, meaning you or your heirs will never owe more than the home's value when it's sold.
Yes, you can sell your home at any time, but the reverse mortgage balance must be paid off from the sale proceeds.
Yes, there are upfront costs, including origination fees, closing costs, mortgage insurance premiums (for HECMs), and servicing fees. These can often be financed into the loan.
Yes, but you must use the reverse mortgage proceeds to pay off your existing mortgage first.
The three main types are: - **Home Equity Conversion Mortgage (HECM)**: Federally insured and most common. - **Proprietary Reverse Mortgage**: Private loans for high-value homes. - **Single-Purpose Reverse Mortgage**: Government or nonprofit-backed for specific uses like home repairs.
Yes, through a HECM for Purchase (H4P), which allows you to buy a new home while getting a reverse mortgage in one transaction.
You have a **three-day "right of rescission"** after closing to cancel the loan without penalty. After that, you must repay the loan if you want to terminate it.

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