Answers to the Top 5 FAQs About Reverse Mortgages in Florida
If you’re starting to explore your estate planning options, you may see the term “reverse mortgage” come up in connection with your research. The specifics vary, but the general arrangement is that you access a portion of your home’s equity as a loan. You don’t have to pay monthly mortgage payments, and you can use the proceeds however you want.
Based on these and other attractive features, you may be wondering where you can sign up for such a great deal. Well, don’t move too quickly on a reverse mortgage, at least not until you go over your options with a Florida elder law and estate planning attorney. In the meantime, you may find it useful to review some common questions about reverse mortgages.
- What are the eligibility rules? To qualify, you must be at least 62 years old and be the owner of record of the property. You can only obtain a reverse mortgage on certain types of real estate, including:
- A single-family residence;
- An apartment or other structure that contains no more than four dwellings;
- A condominium approved by the Federal Housing Administration (FHA); or,
- A manufactured home that meets FHA requirements.
In addition, you must also have enough equity in the property to cover the reverse mortgage.
- Do I still own my home in a reverse mortgage? You will remain the owner of the home and can live in it for as long as you choose. You pay back the reverse mortgage loan when you sell the property, or you can also opt to pay back the money and keep the home. The caveat is that you must use it as your primary residence. If you have an existing mortgage, the proceeds from the reverse mortgage must apply to pay it off when you close the transaction.
- How can I apply reverse mortgage funds? Once applied to any existing mortgage, you have freedom to use the proceeds. Many individuals pay the health care costs, including in-home care. You may also spend the funds for other living expenses, renovations, and much more.
- What are my obligations for additional costs? Because you’re still the owner, you must pay all expenses related to property taxes and insurance. Plus, you’re responsible for general repairs and maintaining the home according to FHA requirements. Because there are no restrictions on how you can spend reverse mortgage funds, you can pay these additional costs from the proceeds.
- What happens when I pass away or no longer live in my home? The reverse mortgage becomes due when you die or are no longer using it as a primary residence. Note that your heirs will be responsible for paying any remaining balance if you give them the home upon death.
A Florida Estate Planning Lawyer Can Answer Additional Questions
For more information on reverse mortgages and other alternatives, please contact Dade City estate planning lawyer Laurie R. Chane. You can schedule a consultation by calling 352-567-0055 or visiting our website. We assist clients throughout Pasco County in a wide range of elder law and estate planning matters.