If you want to increase your income during your retirement years, one possible way to do it is to take out a reverse mortgage against the equity in your home.

But you likely have more than a few questions before you proceed with calling reverse mortgage lenders in Indiana. Following are some answers to some of the questions which homeowners frequently ask us about reverse mortgages.

Reverse Mortgage in Indianapolis, IN

Q: Only one of us is age 62 or higher. Can we still get a reverse mortgage?

A: Yes. It is only required that one borrower be age 62 or higher to qualify for reverse mortgage. If the other borrower is younger, that will not interfere.

Q: Can I stay in my home?

A: Yes. Reverse mortgages are designed to allow you to continue to live in the home while you borrow against your equity. There will be no need to leave your house at any point, whether now or in the future.

Q: When do I need to repay the revere mortgage?

A: Technically, a reverse mortgage is a loan like any other which must be repaid. But you probably will not be the one who repays your loan.

Why? Because the reverse mortgage balance is not due until what is known as a "maturity event" occurs. Following are a couple of examples of maturity events which would cause the loan to be due:

• Every borrower on the loan is deceased
• You sell the home

Obviously, in the former case, you would not be responsible for repaying the loan since you will no longer be in the picture. It would instead fall to your heirs (more on that later).

If you sell the home before that happens, then you will need to pay back the reverse mortgage.

Q: Will my retirement benefits be affected?

A: In most cases, Social Security and Medicare payments are not reduced if you take out a reverse mortgage. This makes income from a reverse mortgage different from other types of income which can eat into your retirement benefits.

But if you are receiving other types of benefits (i.e. food stamps), the amount that you qualify for could change if you take out a reverse mortgage. This is something to investigate before making your decision.

Q: Do I have to pay taxes on the income from the reverse mortgage?

A: That depends, but in most cases, no, you do not. But do not forget that your property taxes still apply.

Q: Do I qualify for a reverse mortgage?

A: There are several considerations in determining whether you qualify for a reverse mortgage. The first is that either you or another borrower must be age 62 or above. The next is that you must borrow against your primary residence (not a second home or an investment property) in which you own 50% or greater equity.

When you apply, your income, credit and tax history all can impact your eligibility.

Finally, you can only qualify for a reverse mortgage—and only continue to receive one—if you are up to date on homeowners association payments, property taxes, and other maintenance payments on your home.

Q: What happens to my heirs?

A: While one of the key benefits of a reverse mortgage is not needing to ever pay it off during your lifetime so long as you do not sell your home, naturally, this does affect your heirs.

When you die, your home will pass to your heirs, along with the reverse mortgage and the responsibility to pay it off.

Your heirs then have a decision to make. If they want to keep the home, they will have to pay off the reverse mortgage.

But if they cannot afford the reverse mortgage, they can sell the home to pay it off.

Is it possible to sell the home and still not be able to pay off the reverse mortgage in full? Will your heirs be saddled with extra debt? The answer to this question is “no,” if you have an FHA-insured reverse mortgage. The limit of the amount due on the loan is the home’s value according to the appraisal before the sale.

What if the home sells for more than the amount due on the reverse mortgage? Your heirs receive that money and can use it any way they want.

Keep in mind that if you do receive a windfall of money in the future, you can pay off the reverse mortgage debt yourself if you prefer, and just leave your heirs with the home to inherit.

Q: Where can I find reverse mortgage lenders near me?

You’re in the right spot! We work with homeowners throughout Indiana on reverse mortgages.

We Can Answer Your Reverse Mortgage Questions

Have additional questions about reverse mortgages? We can answer them. Please give us a call today at (317) 255-0062 to schedule a reverse mortgage consultation in Indianapolis. Let’s increase your income during retirement.