FAQs & Resources

As a reverse mortgage expert, I have the answers to your loan questions. Are you over the age of 62? Do you live in Los Angeles or its surrounding areas? Contact me, today to get all the answers you need today.

Reverse Mortgage Questions

How Do I Qualify For A Reverse Mortgage?

To be eligible for a reverse mortgage, you generally need to be at least 62 years old and own your home outright or have significant equity to pay off existing balances. Your home must be your primary residence. As part of the qualification process, a financial assessment is conducted to ensure your ability and willingness to meet ongoing obligations.

How Much Money Could I Get?

The amount you can receive depends on several factors: your age at closing, your home’s value, any existing liens, and current interest rates. The payoff of your current mortgage and other mandatory obligations, along with your chosen payment option, will also influence the final amount. Please note that HUD limits initial withdrawals to 60% of the available funds (after closing costs) in the first year. The remaining funds become accessible starting in the second year.

This initial disbursement limit allows for the greater of:

  1. 60% of your total loan amount after closing costs within the first 12 months from closing, OR

  2. The sum of your mortgage debt, closing costs, mortgage insurance premium and any tax liens plus 10% of your total loan amount.This total cannot exceed your total loan amount at closing.

How Do I Receive My Money?

You have flexible options for receiving your funds. You can choose a single lump sum (up to HUD’s first-year maximum withdrawal limit)*, set up a line of credit, receive monthly payments, or create a combination of these. During the first year, your Line of Credit or monthly payments cannot exceed 60% of your Principal Limit. After the first year, your available Line of Credit or monthly payment amounts may increase.

*Important Note: Fixed interest rate reverse mortgages only offer the Single Disbursement Lump Sum payment plan.

What Costs Are Associated With A Reverse Mortgage?

The fees and costs associated with a reverse mortgage cover various items. These may include a counseling fee, an origination fee (paid to the broker/lender), a Mortgage Insurance Premium (MIP) paid to FHA for Home Equity Conversion Mortgages (HECMs), an appraisal fee, flood certification fee, document preparation fee, and various title, settlement, and escrow fees. All these costs are transparently detailed on your Good Faith Estimate (GFE). Monthly servicing fees might also apply.

What Are The FHA Mortgage Insurance Premium Charges?

FHA requires a Mortgage Insurance Premium (MIP) both at closing and throughout the life of the loan. These premiums are added to your loan balance. The upfront MIP is calculated based on your home’s appraised value or a maximum of $1,209,750 (the 2025 national HECM limit cap) and is due at closing. Ongoing FHA insurance premiums are calculated monthly based on your outstanding loan balance.

Is It Required That I Receive Counseling Before Getting A Reverse Mortgage?

Yes, absolutely. Counseling with an independent, HUD-approved third-party counselor is mandatory. This protects borrowers by ensuring they receive accurate and unbiased information about reverse mortgages. Your lender must have your counseling certificate before the loan can close. To find a reverse mortgage counselor near you, please contact your Mortgage Loan Originator or your local HUD office.

Do I Get Taxed On The Money I Receive From My Reverse Mortgage?

Generally, the proceeds you receive from a reverse mortgage are not considered taxable income. However, it’s always best to consult with your personal tax advisor for advice specific to your situation.

Do I Have To Pay Any Fees To The Reverse Mortgage Lender During The Course Of My Loan?

Reverse mortgages are designed so that borrowers typically don’t have to make regular payments for most fees during the loan term. Initial upfront costs usually include the appraisal and the HUD-approved reverse mortgage counseling (some agencies may waive counseling fees). However, there may be a small monthly servicing fee associated with the reverse mortgage, which will be financed and added to your loan balance. For more details on the service set-aside, please speak with your Mortgage Loan Originator at The Friendly Lender.