Reverse Mortgage Facts

1. Borrower will retain full ownership of the home by remaining on the title.

2. Your Medicare and Medi-Cal benefits will not be affected.

3. Funds received from a reverse mortgage are non-taxable.

4. No monthly repayment required-but you still have the option to pay as little or as much as you would like each month toward the principal and interest. 

5. You can use the funds received from a reverse mortgage any way you wish. Pay off debt, healthcare cost, cover in-home care cost, investment, travel, home improvement, or simply save it.

6. Borrowers are responsible for paying taxes, insurance, and any upkeep on the property.

7. Reverse mortgage loans come with non-recourse protection so you’ll never owe more than your house is worth when the loan is repaid.  

8. You'll need to pay capital gain taxes on a reverse mortgage sale IF you make a profit of at least $250k if you're single or $500k if you're married. 

9. ​Most of the fees associated with a reverse mortgage loan (other than the required counseling) can be financed with your loan. This helps cut down on up-front costs.

10. A reverse mortgage loan can’t be canceled or reduced by the lender, as long as you meet your loan obligations and live in the home as your primary residence.

11. The loan does not have to be repaid until you sell the property, no longer live in the home as your primary residence for longer than 12 months, or pass away.

12. Typically, the loan (along with accrued interest and fees) is repaid with funds received from the sale of the home, and you or your heirs retain any remaining money after the loan is repaid. If you or your heirs want to keep the property, the loan can be repaid at any time using a traditional mortgage or other assets.

13. Heirs have 30 days from the time the loan becomes due to repay and can possibly receive up to a 6 month extension.    

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