Disclosure and Licensing Information

Reverse mortgage loan terms require the borrower(s) to occupy the home as the primary residence, pay for the maintenance and upkeep of the home, pay property taxes and homeowners insurance, and comply with the terms within the loan documents; otherwise, the loan becomes due and payable and can result in the loss of the home. Although property costs may be substantial, the lender does not establish an escrow account for certain recurring property charge payments, such as taxes and insurance. However, a set aside account may be set up for those charges, and in some cases may be required based on a financial assessment. Not all interest on a reverse mortgage is tax-deductible, and to the extent that it is, such deduction is not available until the loan is partially or fully repaid. 

Certain charges will be assessed with the loan, including a counseling fee (if counseling is required by the applicable Federal Housing Administration (FHA)/U.S. Department of Housing and Urban Development (HUD) Home Equity Conversion Mortgage (HECM) guidelines and/or lender guidelines) prior to application, an appraisal fee prior to loan approval, an origination fee, mortgage insurance premium (if required by the applicable FHA/HUD HECM guidelines), and other third-party closing costs at the loan’s closing, and servicing fees after the loan closes. Closing and servicing fees will be added to the loan balance. Over the life of the loan, interest is charged on the loan balance, which grows over time. A reverse mortgage increases the principal mortgage loan balance and decreases home equity, which is known as negative amortization. At the conclusion of the reverse mortgage when the last borrower (or eligible non-borrowing spouse, if applicable to the HECM loan) dies, sells the home, permanently moves out, or fails to comply with the loan terms, the loan becomes due and payable (and the property may become subject to a tax lien, encumbrance, or foreclosure). When the loan becomes due and payable, some or all of the equity in the property that is subject to the reverse mortgage no longer belongs to the borrower(s), who may need to sell the home or otherwise repay the loan balance with interest from the proceeds of the sale or other assets.