Ins and Outs of Reverse Mortgages | Service First Mortgage

The kids are all grown up and work has taken a back seat. Now that you’ve entered your golden years, it’s time to shift the focus onto you.

As time progresses, your priorities will undoubtedly begin to change, but that doesn’t mean that you have to give up your personal and financial independence. So how do you maintain this? A reverse mortgage could be the answer you’re looking for.

You’ve likely heard of this product before and may have questions. With a reverse mortgage, you can tap into your home’s equity to use in a number of ways. Rather than paying a monthly mortgage payment, you can choose not to make a mortgage payment, receive a monthly payment from your equity, or establish a growing line of credit to be used when you need it, all while maintaining ownership of your home.


As a home owner, you’re already familiar with the way a traditional mortgage works. After making your initial down payment, you made monthly payments toward the loan. As time progressed, you paid interest and principal, ultimately earning equity in the home along the way. With a reverse mortgage, you can tap into your home’s equity in order to generate income for yourself. Rather than paying a monthly mortgage payment, you will receive money that you can use, all while maintaining ownership of your home.


A reverse mortgage can be a useful financial tool, but there are specific eligibility requirements that need to be met.

  • The youngest borrower must be at least 60 years old (or 62 years old, for an FHA Insurance [HECM])
  • You must live in your home as the primary residence (this means no investment properties are eligible)
  • You must be listed as the owner of your home on the title
  • You must have sufficient equity in your home
  • Must meet FHA property and flood requirements
  • Must be one of the following types of property: single family home, 2-4 unit home (with one unit being occupied by you), or FHA-approved condo

With this type of loan, you will not be required to make monthly payments toward the balance – the balance will become due when the last borrower no longer lives in the home or passes away, or when the home is sold. It is important to note that, while monthly payments are not required, you will still need to maintain the home and pay applicable property taxes, home owners insurance and HOA fees. Neglecting to pay those items will not only cause issues with your local municipality, it will also cause the balance of the mortgage to become due.


One of the benefits of a reverse mortgage is that you can use the funds however you’d like! Need to hire in-home assistance? Need to downsize your home? Need a supplement to your retirement fund? All of these can be done using the proceeds from a reverse mortgage.

In addition, you have the option of receiving funds a variety of ways

  • Line of Credit: Draw from the line as needed
  • Lump Sum: Receive the proceeds of loan all at once
  • Term: Receive advances for a set period of time
  • Tenure: Receive advances monthly for as long as you live in your home
  • Any combination of the above!




Reverse mortgages have many nuances that differentiate them from traditional mortgages, so it is important to discuss your financial goals with an experienced Loan Officer in order to ensure you’re completely up-to-speed before signing on the dotted line.

Service First has a dedicated team dealing specifically with Reverse Mortgages, so you can rest assured that the team will be informed about new developments affecting these mortgages, as well as any requirements necessary to make the lending process as seamless as possible.

If you’re ready to get started on your home buying journey, we can help!
Contact us today!

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