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Take a moment to understand a Reverse Mortgage.

Didier Malagies • May 18, 2022

A reverse mortgage is designed as a financial tool to help seniors age in place by tapping into their home equity, which can be used for whatever purpose they see fit, from paying off medical bills and utility expenses to funding improvements or renovations.

A reverse mortgage can work well for seniors who are living on a fixed income and want to pay off debt or fund their retirement, but it’s not right for everyone. It’s important that you carefully consider your options before taking this step.

What is a reverse mortgage?


A reverse mortgage is a loan. The lender issues you a payment based on the value of your home, minus any outstanding debts and costs to maintain the property.

The loan is partially repaid when you sell or refinance your home. But if you don't use the money to pay off the home equity line of credit or remove it from your house before you die, then it becomes a lien against your estate.

The funds are tax-free and do not require monthly payments. If you end up needing additional cash flow during retirement, however, reverse mortgages can also be converted into an annuity—a monthly payout for life (with no interest charges).



A Reverse Mortgage is not a new concept; it has been around for more than 50 years and has helped tens of thousands of seniors.


Reverse Mortgages were established in 1961 and have been used to help seniors live comfortably in their own homes.


The first reverse mortgage was insured by the FHA (Federal Housing Administration). This program was designed to help seniors who wanted to remain in their homes, but needed financial assistance due to a lack of income or poor health. In today's world, this type of loan is still available for those who qualify for one.



A reverse mortgage is simply the opposite of a traditional mortgage.


A traditional mortgage is a loan you take out to buy a home, with the goal of building equity over time as you pay off the loan. With a reverse mortgage, you are not required to make monthly payments, but the loan balance increases over time as interest on the loan and fees accumulate. When you die, your heirs can inherit your home without having to make any payments on it or take any action.



A reverse mortgage is not just another loan product.


It's a financial planning tool that can be used as part of an overall retirement plan.


You can pay off your loan at any time by selling your home or refinance with another lender. But unlike other types of loans, this type doesn't require monthly payments from you—as long as you remain living in the home and keeping up with maintenance costs (such as property taxes).


A reverse mortgage allows you to convert your home equity into either monthly or lump sum payments or both, while still living at home. The funds are tax-free and there are no required monthly payments, as long as you remain living in the home and continue to maintain it.


A reverse mortgage is a loan that lets you convert your home equity into money while still living in your home.


The funds can be used for any purpose, including:

  • Paying off the mortgage
  • Providing monthly payments to supplement other income sources or to help pay off debts and/or medical expenses
  • Taking out a lump sum payment to use as you wish, such as buying a new car or traveling abroad



Who uses a reverse mortgage?

  • Seniors who are "cash poor but house rich" and need supplemental income
  • People who want to pay off debts
  • People who want to remain in their homes, such as those with special needs or who want to age in place
  • Those who need money for medical bills or other expenses related to living at home. Reverse mortgage borrowers must be 62 years old or older. If you’re younger than 62, there are other options for financing your retirement, such as Social Security benefits and personal savings. To qualify for a reverse mortgage, you must:  * Be age 62 or older;  * Be the owner and occupant of the home; and  * Have sufficient equity in your home (the amount depends on the type of loan).


Seniors who have paid-off their traditional mortgages may choose this option to supplement their social security benefits, pensions, and savings so they can stay in their homes and improve the quality of the rest of their lives.


You may want to consider a reverse mortgage if you are:

  • Retired and have paid off your traditional mortgage. You can borrow against the value of your home without having to make monthly payments.
  • Wanting to supplement your income.
  • Paying off existing debt.
  • Needing money for medical bills or other current expenses that cannot be covered by Social Security, pensions and savings alone.
  • Wanting an opportunity to improve the quality of the rest of their lives by staying in their homes for as long as possible – even if it means delaying some planned expenses or activities until later in life when finances allow such things again (like travel).


If you would like to speak to a Reverse Mortgage advisor, give us a call (727) 784-5555. Or use our form below to ask a question.


Have A Question?

Use the form below and we will give your our expert answers!

Reverse Mortgage Ask A Question


Check out our other helpful videos to learn more about credit and residential mortgages.

By Didier Malagies December 20, 2024
Older homeowners have an overwhelming preference to age in place , but these circumstances can also come with unique challenges. Feelings of isolation and loneliness rank highly among these issues, but a recent study suggests that aging in place with a pet can make a big difference. The study, highlighted in Psychology Today , also noted that having pets in later life can come with its own set of unique challenges , according to Ann Toohey, one of the authors of the study who is based at the University of Calgary. The study followed initial interviews conducted in 2015 by examining how owning a pet impacted the lives of older people aging in place in their homes. According to the study, several takeaways emerged, including that the companionship of a pet makes a difference in their owners’ lives. While the companionship provided is understandably different from what is offered by another person, it also came with other potential social benefits for the seniors who owned pets. “As it happened, most of the people in this study were single,” the report in Psychology Today noted. “Having a dog, in particular, was a good way to get to know other people, so pets could also increase the size of participants’ social networks.” Finding pet-friendly housing can be an issue, according to the respondents. While the subjects were committed to keeping their pets, the housing challenges that pets can present made for a unique challenge. “Because people did not want to give up their pets, they sometimes had to accept housing that was less than ideal or even not safe due to other people in the home,” the report explained. Pets can also have other impacts on an older person’s mental well being, the study found, particularly if an older pet owner endured certain health-related challenges. “As people got older, they sometimes had difficult circumstances to deal with, such as serious issues with their own health,” the report said. “Caring for their pet provided meaning through these hard times, and a sense of things continuing to be the same, at least in some regards. In this way, the pet helped them to cope with the challenges.” Toohey added that while the seniors profiled in the study were generally committed to keeping their pets, the potential housing challenges that pet ownership can present for some older people seeking housing need to be addressed. There is a lot of potential for what she calls “companion animal relationships” to promote health in “many ways that are salient to aging.” These include spurring physical activity by walking a pet, companionship and potential involvement in pet-centric social activities with other pet owners. But certain challenges are also a factor, including the cost of pet supplies, a lack of affordable support if a pet owner becomes ill, and the need for veterinary care. There are also housing-related challenges, which could include “the prevalence of no pet rules to size restrictions to extra fees,” she said. In terms of housing policies tied to aging in place, these barriers could have the most impact, according to the report. “Greater availability of seniors’ housing that allows pets would be very beneficial and would make it easier for people to age in place with their pet,” the report said. “This would benefit those who aren’t seniors too, as more pet-friendly housing would help a wide range of people.”  This is on top of other well-documented challenges older people can face when trying to age in place. These include the high cost of long-term care , a need to create more walkable communities and housing supply illus trates that impact prospective homebuyers of all ages.
By Didier Malagies December 17, 2024
Older homeowners have an overwhelming preference to age in place , but these circumstances can also come with unique challenges. Feelings of isolation and loneliness rank highly among these issues, but a recent study suggests that aging in place with a pet can make a big difference. The study, highlighted in Psychology Today , also noted that having pets in later life can come with its own set of unique challenges , according to Ann Toohey, one of the authors of the study who is based at the University of Calgary. The study followed initial interviews conducted in 2015 by examining how owning a pet impacted the lives of older people aging in place in their homes. According to the study, several takeaways emerged, including that the companionship of a pet makes a difference in their owners’ lives. While the companionship provided is understandably different from what is offered by another person, it also came with other potential social benefits for the seniors who owned pets. “As it happened, most of the people in this study were single,” the report in Psychology Today noted. “Having a dog, in particular, was a good way to get to know other people, so pets could also increase the size of participants’ social networks.” Finding pet-friendly housing can be an issue, according to the respondents. While the subjects were committed to keeping their pets, the housing challenges that pets can present made for a unique challenge. “Because people did not want to give up their pets, they sometimes had to accept housing that was less than ideal or even not safe due to other people in the home,” the report explained. Pets can also have other impacts on an older person’s mental well being, the study found, particularly if an older pet owner endured certain health-related challenges. “As people got older, they sometimes had difficult circumstances to deal with, such as serious issues with their own health,” the report said. “Caring for their pet provided meaning through these hard times, and a sense of things continuing to be the same, at least in some regards. In this way, the pet helped them to cope with the challenges.” Toohey added that while the seniors profiled in the study were generally committed to keeping their pets, the potential housing challenges that pet ownership can present for some older people seeking housing need to be addressed. There is a lot of potential for what she calls “companion animal relationships” to promote health in “many ways that are salient to aging.” These include spurring physical activity by walking a pet, companionship and potential involvement in pet-centric social activities with other pet owners. But certain challenges are also a factor, including the cost of pet supplies, a lack of affordable support if a pet owner becomes ill, and the need for veterinary care. There are also housing-related challenges, which could include “the prevalence of no pet rules to size restrictions to extra fees,” she said. In terms of housing policies tied to aging in place, these barriers could have the most impact, according to the report. “Greater availability of seniors’ housing that allows pets would be very beneficial and would make it easier for people to age in place with their pet,” the report said. “This would benefit those who aren’t seniors too, as more pet-friendly housing would help a wide range of people.”  This is on top of other well-documented challenges older people can face when trying to age in place. These include the high cost of long-term care , a need to create more walkable communities and housing supply illus trates that impact prospective homebuyers of all ages.
By Didier Malagies December 16, 2024
A condo questionnaire is a critical document that lenders use during the mortgage approval process for condominium purchases. It provides detailed information about the condo complex's financial health, rules, regulations, and overall condition. Problems with the condo questionnaire can create delays or complications during the closing process. Here are some common issues that might cause problems: 1. Financial Health Concerns High percentage of owner-occupancy: Many lenders require that at least 50% (or more) of the units in the complex be owner-occupied rather than rented. If a condo complex has too many renters, it could impact the lender’s willingness to approve a loan. Reserve fund issues: Lenders typically want to see that the condo association has sufficient funds in its reserve account for future maintenance and emergencies. If the reserve fund is too low or non-existent, it raises concerns about the financial stability of the association, leading to potential loan rejection. Delinquencies in condo fees: A high rate of delinquencies in the condo association fees can signal financial instability, which lenders may view as a risk. This can delay or halt the approval process. 2. Insurance Coverage Problems Lack of adequate insurance: Lenders require that the condo association carries specific types of insurance, including property insurance and liability coverage. If the condo association's insurance policy doesn’t meet the lender's criteria, the loan may be delayed or denied. Insufficient flood insurance: If the condo is in a flood zone, the association is required to have flood insurance. A deficiency in this area can cause significant issues with closing. 3. Pending or Recent Litigation Ongoing lawsuits: If the condo association is involved in a lawsuit (e.g., against contractors, residents, or local authorities), it can be a red flag for lenders. Lawsuits can create financial and legal uncertainty, so lenders may hesitate to approve a loan until the matter is resolved. History of litigation: Even if the condo association is not currently involved in litigation, a history of legal problems could still concern lenders and complicate the approval process. 4. Non-Compliance with Condominium Guidelines Failure to meet FHA/VA guidelines: Some buyers are using FHA or VA loans, which have specific guidelines regarding condo developments. If the condo does not meet these criteria (for example, not having enough unit owners, or a commercial component taking up too much space), it can prevent the buyer from securing the loan. Non-compliant rules or by-laws: If the condo association's rules or by-laws are outdated or do not comply with lender requirements (such as restrictions on renting out units), it can create issues. 5. Discrepancies or Incomplete Information Incomplete or missing information: If the condo questionnaire is not fully completed or there is missing information about the financials or maintenance issues, lenders may hold up the approval process. Incorrect or inconsistent data: Discrepancies between the information provided in the questionnaire and the condo association’s financial statements can raise red flags, requiring additional clarification or investigation. 6. Excessive Commercial Units or Mixed-Use Properties High commercial occupancy: If a condo development has a high percentage of commercial space or mixed-use properties (residential and commercial), lenders might view this as risky. Lenders prefer predominantly residential complexes since they have a lower risk profile. 7. Special Assessments Upcoming or recent special assessments: If the condo association has recently passed a special assessment (a fee charged to condo owners for unexpected repairs or improvements) or plans to do so in the near future, it can lead to concerns about the financial health of the complex and may affect the lender's decision to approve the loan. 8. Age of the Building Older buildings with deferred maintenance: Lenders might be cautious about approving loans for condos in older buildings that have not been well-maintained. They may require detailed maintenance records or a building inspection to ensure that the property is in good condition. Conclusion Issues with the condo questionnaire that could cause problems during closing typically revolve around the financial stability, legal status, and physical condition of the condo association and its property. It's important for both the buyer and the seller to address these issues early in the process by working with the condo association to provide accurate, complete, and compliant documentation to the lender. By messaging ChatGPT, you agree to our Terms and have read our Privacy Policy. Don't share sensitive info. Chats may be reviewed and used to train our models. Learn more tune in and learn at https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
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