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Bloomfield Office
Three Regency Drive
Bloomfield, CT 06002
Phone: (860) 242-2221
Fax: (860) 286-0185New Haven Office
1164 Townsend Avenue
2nd Floor
New Haven, CT 06512
Phone: (203) 468-4770
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REVERSE MORTGAGE - FAQ 04-11-2008 WHAT IS REVERSE A MORTGAGE? A reverse mortgage is a specialized loan which enables senior citizens (age 62 and older) to access the equity they have built up in their home. WHAT IF MY SPOUSE IS UNDER AGE 62? Your spouse will not be able to participate in the reverse mortgage. All individuals listed on the title must be 62 or older to be eligible for the reverse mortgage. DO I QUALIFY FOR A REVERSE MORTGAGE IF MY HOME IS HELD IN A LIVING TRUST? Yes, as long as you are the trustee and are qualified by age. DOES THE IRS CONSIDER MONTHLY MORTGAGE PAYMENTS AS INCOME? No, the IRS currently treats reverse mortgage proceeds as loan advances rather than as taxable income. HOW ARE MY MEDICAID OR SSI BENEFITS AFFECTED? Monthly income from a reverse mortgage does not affect most means-tested benefits as long as the cash advances are spend each month and not accumulated. WHEN DO I HAVE TO REPAY THE LOAN? The loan comes due when you move out of your home, sell your home, or die. If more than one person is listed on the loan, the loan comes due when the second person meets any of these circumstances.WHAT IS DUE WHEN THE LOAN IS REPAID? You must repay the principal amount received plus accrued interest and accumulated service charges. WHAT IF I OWE MORE THAN MY HOME IS WORTH? Reverse mortgages are designed as “non-recourse” loans. This means that you will never owe more than the value of your home regardless of the loan balance. ARE THERE RESTRICTIONS ON HOW I CAN USE THE PROCEEDS FROM MY REVERSE MORTGAGE? There are no restrictions on how you may use the proceeds received through a reverse mortgage. Some of the things you may consider are: - eliminating an existing mortgage;- supplementing retirement income; - remodeling or repairing your home; - paying property taxes; and - covering healthcare expenses You can even use the proceeds to purchase a second or vacation home. WILL I STILL HAVE AN ESTATE THAT I CAN LEAVE TO MY HEIRS? Any remaining equity in your home belongs to you. None of your other assets will be affected by the reverse mortgage. Your heirs will be able to decide whether to keep or sell the house. If they decide to kept it, they must pay the balance due on the reverse mortgage. Otherwise, they may sell the home and use the proceeds to payoff the remaining mortgage. Your heirs get to keep any excess proceeds from the sale of the house. For more information, please contact Attorney Francis J. Farrelly.
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