Top Frequently Asked Questions
- What Is A Reverse Mortgage?
- A reverse mortgage is a loan that enables homeowners, age 62 and older, to convert a portion of their home equity into tax-free money consult your tax advisor without having to sell their home, give up title to it, or make monthly payments. A reverse mortgage only becomes due once your home is sold or estate is settled.
- How Much Money Can I Get?
- The total amount of reverse mortgage funds available depend on several factors including the age of the youngest homeowner, the type of reverse mortgage selected, current interest rates, the appraised value of your home and FHA lending limits for your area. In most cases, the older you are, the more valuable your home, and fewer real estate liens (i.e. existing mortgages or home equity loans), all increase the amount of reverse mortgage money you can obtain.
- How Can I Receive Payments?
- Reverse mortgage payments are tax-free consult your tax advisor and can be received in a variety of ways, so a reverse mortgage payout plan can be tailored to fit your needs:**
- Receive the money all at once, in the form of a single lump-sum payout
- Receive equal monthly payments for as long as the home is your primary residence
- Receive equal monthly payments for a fixed period of time
- Set-up a line of credit to obtain funds at any time until the line of credit is exhausted
- Combine options
** The homeowner must also continue to occupy the home as their primary residence, keep it in good repair, with all taxes and insurance premiums kept up to date, subject to the terms of the mortgage.
- How Do I Qualify?
- Qualifying for a reverse mortgage is easy. You qualify based on the value of the home, age of the youngest homeowner and the current interest rate. Credit score is not considered, so almost any homeowner age 62 and over is eligible.
- Other FAQ's
Top Reverse Mortgage Uses
- Eliminate Monthly Debt Payments
- For many homeowners, making monthly payments on a home equity loan, mortgage, car loan, or credit cards can be challenging. This is especially true when rising interest rates cause payments to go up - yet fixed retirement incomes remain the same. With a reverse mortgage, you will eliminate your monthly mortgage and home equity loan payments. That’s because reverse mortgage proceeds must first be used to payoff any real estate secured liens, if they are present. Many then choose to payoff other debts as well with their reverse mortgage. M&T’s Reverse Mortgage provides peace-of-mind, and an improved quality of life, by eliminating payments associated with:
- Home equity loans
- Car loans
- Credit cards
- Other unsecured debts
- Cash For Daily Living
- Would you like to obtain extra cash for day-to-day living expenses, or simply to enjoy a better lifestyle? With M&T’s Reverse Mortgage, you can use your home to supplement retirement income for virtually any need including:
- Utility bills
- Medical bills
- Prescription drugs
- Landscapers or snow removal services
- Home repairs
- Family gifts
- A “rainy day” emergency fund
- Paying For Medical Expenses
- Access to quality health care is challenging for many Americans, but this is especially so as the cost of prescription drugs, in-home care and physical rehabilitation continue to rise. With these increased costs, many have difficulty coping due to their limited financial resources. Very often they find themselves having to choose between health care, heat, food or other necessities. The good news however, is that now you have a choice. A reverse mortgage can be your cure for high medical bills. A reverse mortgage from M&T can help pay for virtually any health care expense including:
- Annual Medicare or private insurance deductibles
- HMO co-payments for doctor visits
- Prescription drug costs
- In-home caregivers
- Physical rehabilitation
- Durable medical equipment not covered by Medicare
- Medical supplies
- Any other medical expense
- Home Improvements
- Your home is more that just a roof over your head. It contains a lifetime of memories, is a symbol of your independence and adds immensely to your quality of life. If you're interested in improving your home, a reverse mortgage may be able to hlep you obtain additional cash to:
- Add siding or a new roof
- Install energy efficient windows
- Put in a new driveway
- Add a deck, patio or landscaping
- Remodel a kitchen or bath
- Add a new addition
- Add a main floor laundry
- Complete any other home improvement you can think of
- Dream Purchases
- Has a lack of money kept you from owning, or doing, the things you've always dreamed of? With a reverse mortgage you can start living your dreams. A reverse mortgage from M&T can provide income for practically anything including:
- A vacation home, 2nd home condo or time-share
- Making home improvements
- Other Common Uses
Reverse Mortgage Tips From M&T
- Understand Your Options
- Reverse mortgages have helped hundreds of thousands of homeowners improve their quality of life in retirement. That doesn’t mean they are for everyone though. If for instance you’re considering a reverse mortgage solely for the peace of mind it provides, other options like a home equity line of credit should also be considered. The lender you work with should always be willing to discuss other options with you.
- Involve Others
- Family members, friends and professional advisors can provide outside counsel if you’re unsure whether a reverse mortgage makes sense for you. The lender you select should welcome their participation in the process, if that’s your wish, and encourage everyone to ask as many questions as possible.
- Lookout For Scams
- As is the case with any product, you may encounter people seeking to take advantage of you. Things to look for include any person that attempts to sell you an annuity using the proceeds of a reverse mortgage. Or those who suggest a younger spouse, under age 62, should be removed from the title of your home in order to qualify. Either of these practices can have unfortunate consequences.
- Work With A Reputable Lender
- M&T Bank is one of the country's most highly regarded regional banks. For over 150 years we’ve built our business on a tradition of reliability and responsiveness to the needs of our customers, all while adhering to the highest ethical standards. As an active member of NRMLA (National Reverse Mortgage Lenders Association), we subscribe to the NRMLA Code of Ethics and Best Practices Standards created to protect borrowers from predatory lending practices associated with reverse mortgages. A reverse mortgage provider for over 10 years, our reverse mortgage specialists receive comprehensive training on how to protect the interests of our customers and prospective customers. Our mission is to help educate you about, and guide you through, the reverse mortgage process so you can feel comfortable making an educated decision about whether a reverse mortgage is right for you.
- Other Tips