1. A reverse mortgage allows seniors to access home equity money for retirement expenses.

2. Reverse mortgage funds are most commonly used to cover home improvements, allow seniors to stay in their homes longer, and increase their overall standard of living.

3. To qualify for a reverse mortgage, seniors must be over the age of sixty-two, own their own home, and live in their home as a primary residence.

4. Although there is no minimum income or credit requirement, the process of securing a reverse mortgage requires significant time and money, so seniors should make sure they qualify for the loan before they proceed. Qualifications for a reverse mortgage become more lenient as you age.

5. The amount of money you can receive from a reverse mortgage depends on your age, or the age of the youngest spouse in the case of couples. Also taken into account are how much your home appraises for, interest rates, and the lending limit in your area.

6. The older seniors are and the more valuable their home, the more money they can qualify for.

7. Seniors should make their reverse mortgage work for them by setting it up either as a monthly payment (the most common type), a line of credit, or one lump sum.

8. Regardless of how a reverse mortgage is set up, homeowners don’t make any monthly payments.

9. Closing costs on reserve mortgages are generally very high. Costs include origination fees, which can be double the rate of conventional mortgages and mortgage insurance.

10. Reverse mortgages can affect a senior’s eligibility for Medicaid, as well as other state and federal programs. Seniors must receive counseling from an independent HUD counselor (sessions cost between $100 and $125) before they are approved for a reverse mortgage. The loans are complex, so the counseling serves to protect the seniors and allows another opportunity to ask all the necessary and proper questions.

Puritan Financial Companies is a diversified financial services firm specializing in helping people from their peak earning years through retirement to secure their financial future. Visit Puritan Life Insurance at www.puritanlife.com. The information contained in this blog post is for informational purposes only and should not be construed as legal, tax, or investment advice.