Frequently Asked Questions (FAQ)

Senior couple relaxing outsideWhat is a reverse mortgage?
A reverse mortgage or Home Equity Conversion Mortgage (HECM) is a way to turn the equity locked in your home into tax free cash* without having to make any monthly mortgage payments.** The funds you receive can be used for almost anything including paying off your existing mortgage (required as part of the loan), eliminating credit card debt, medical and other bills, or simply improving your lifestyle.

A reverse mortgage with AAG is a government insured loan that enables seniors to gain financial independence from their ever increasing living expenses. And the best part — you continue to own your home and there are no credit score or income requirements.***

More than half a million Americans have already discovered the benefits of a reverse mortgage. Below is a chart showing the extraordinary growth and acceptance of Home Equity Conversion Mortgages (Reverse Mortgages) since 2001.

What Can a Reverse Mortgage Be Used For?
The proceeds from a reverse mortgage can be used for almost anything:

  • Pay for medical costs.
  • Pay off existing mortgage (required as part of loan).
  • Pay credit card or other bills.
  • Home repair and improvement.
  • Property taxes and home insurance.
  • Increase monthly cash flow.
  • Supplement your retirement portfolio to increase survivability %.
  • Defer accessing Social Security in order to qualify for maximum benefits.
  • Travel.
  • Gifts.

Why a Reverse Mortgage?
There are numerous benefits in obtaining a reverse mortgage over other types of loans or financial products. The most important thing to remember is that we NEVER own your home. You continue to own your property and can live there as long as you wish. All you need to do is maintain the property and continue paying your home insurance and property taxes.

Here Are Some Important Reasons to Consider a Reverse Mortgage for You:

  • Make no payments for as long as you live in your home. **
  • Continue to live in your own home.
  • Receive tax-free cash. *
  • Several ways to receive the money – lump sum, (or) monthly or a combination.
  • Repay the loan at anytime with absolutely no penalty.
  • Non-recourse loan which means the borrower can never owe more on the loan than what the house is worth.
  • Low interest rates.
  • No income or credit score requirements.

* Please consult your financial advisor
** Homeowners must continue to pay insurance, taxes and basic home maintenance during loan period.

Does the bank own my home?
No the bank never owns your home. You remain the owner of your home and can stay as long as you wish. As the homeowner, you must continue to pay home insurance, property taxes and continue with basic home maintenance during the loan period – that’s it. When the home is sold, the loan is repaid (including accrued interest and any fees) and any remaining equity goes to you or your heirs.
How much can I borrow?
3 factors are considered to calculate how much equity you can access:

1. Age of the youngest borrower
2. Home value
3. Current interest rates.

Although we use the home value you initially provide us to calculate the preliminary loan amount, an independent appraiser must visit your home to ascertain the current value of your home. We then re-calculate the loan amount according to this official home value. All this will be organized by your AAG reverse mortgage professional. They can also answer any questions or concerns you may have.

What if you have a mortgage already?
That’s absolutely fine. If you qualify, a reverse mortgage will first pay off your existing mortgage and then give you the remaining proceeds. In fact, many of our borrowers use a reverse mortgage for that purpose – to eliminate monthly payments on their traditional mortgage.

Are there any income/credit score requirements?
NO – because you don’t make any monthly payments, proof of your income and credit score are NOT required. A credit report will only be used to check any federal tax liens or other items that may affect qualification.

Will my children lose their inheritance?
The loan is repaid once the last remaining borrower moves out of the home. Normally, the home is sold, the loan (including interest and any fees) is repaid, and any remaining equity goes to you or your heirs. If your children choose to keep the home, they can pay the loan back by using such financial tools as refinancing the reverse mortgage. If they choose to sell the home, they are provided up to 12 months to complete the sale.

Does a Reverse Mortgage require that I make monthly payments?
NO. There are never any monthly mortgage payments. However, payment of taxes, insurance and general upkeep of the home are the responsibilities of the homeowner. The loan becomes due when the last borrower permanently moves out of the home.

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