Looking For A Reverse Mortgage in South Carolina?

Reverse Mortgage FAQ

What Is a Reverse Mortgage?

A reverse mortgage is a loan that allows homeowners aged 62 and older to convert a portion of their home’s equity into cash. The amount you can borrow depends on factors such as the equity in your home, your age, and current interest rates. Funds can be received in several ways: as monthly payments, a lump sum, a line of credit, or a combination of these options. The loan is typically repaid when you sell your home, move out, or pass away.

What Kind of Reverse Mortgages Are Available?

The most common type of reverse mortgage is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA) and accounts for around 90% of reverse mortgages in the U.S. These loans are subject to government regulations that ensure transparency, fee limitations, and mandatory counseling to educate borrowers about their options.

Jumbo reverse mortgages, which are not insured by the FHA, are offered by private lenders. These loans allow for larger payouts to homeowners with high-value homes, but they come with different terms and may carry higher risks.

Do I Qualify for a Reverse Mortgage?

To qualify for a reverse mortgage, you must:

• Be at least 62 years old.
• Own the home outright or have a substantial amount of equity.
• Use the home as your primary residence.
• Meet financial assessment requirements to ensure you can continue paying property taxes, homeowner’s insurance, and any necessary home maintenance.

Unlike traditional loans, reverse mortgages don’t have credit score or income requirements, as no monthly mortgage payments are needed.

Can I Lose My Home with a Reverse Mortgage?

No, you won’t lose your home as long as you meet the terms of the loan, which include continuing to live in the home, keeping the property in good condition, and paying property taxes and homeowner’s insurance. If you fail to meet these obligations, the loan could be called due.

How Big a Reverse Mortgage Can I Get?

The loan amount is based on your age, home value, current interest rates, and the amount of equity in your home. As of 2024, the maximum loan limit for HECM reverse mortgages is $1,089,300, a significant increase from previous years. Jumbo reverse mortgages, offered by private lenders, may allow for even higher loan limits for those with more valuable properties.

How Is the Money Paid Out?

Reverse mortgage proceeds are first used to pay off any existing mortgage or liens on the property, along with any closing costs. The remaining funds can be taken in one of the following ways:

• A lump sum
• Monthly payments (either for a set period or for as long as you live in the home)
• A line of credit (you only pay interest on the amount you use)
• A combination of these options

Is a Reverse Mortgage Right for Everyone?

A reverse mortgage might not be the best option if you plan to move soon or only need a small amount of money for a short-term need. In those cases, a home equity loan or a HELOC (Home Equity Line of Credit) may be cheaper. However, for long-term homeowners who want to stay in their homes, reverse mortgages can offer financial stability. Studies still show that most reverse mortgage borrowers are satisfied with their decision.

How Can I Grow or Maintain the Value of My Home While Having a Reverse Mortgage?

To maintain or improve the value of your home, focus on regular upkeep and improvements, such as:

• Landscaping and curb appeal
• Kitchen and bathroom upgrades
• Energy-efficient windows or appliances These enhancements not only preserve the home’s market value but also make it more comfortable for aging in place.