Traditional mortgages required you to have a job because you were borrowing money from the bank in order to purchase a home. Reverse mortgages do not require the borrowers to have jobs because they are loaning the money from a secured asset, the home, and the terms of the loan state that they will get paid back from the loan at the time the house is sold rather than monthly mortgage payments.
You won’t be able to borrow the entire value of your home because the lender will leave some equity in the home to cover their fees, closing costs, and interest. However, you can borrow whatever you have left. This means that how much you can borrow depends on the value of your home and your personal circumstances. If the lender’s actuaries calculate that you are likely to live in your home for a longer amount of time then you will get less money than if they project you to not live in the home for very long.
You can take a one-time lump sum, open a credit line, get monthly payment checks, or any combination of the above. For instance you may need some money now so you take a lump sum for a portion of the reverse mortgage amount, but you open a credit line for the remainder in case you need money again in the future.
Many of the normal closing costs that are associated with a mortgage loan are also involved with a reverse mortgage loan. These costs include appraisal fees, loan origination fees, servicing fees, interest rates, points, and more. You can finance these fees into your reverse mortgage so that there will be no out-pf-pocket expenses. Remember that the servicing fee may be reoccurring. If you choose a payment option that needs to be serviced like monthly payments or a credit line, then your mortgage lender may charge you service fees throughout the life of your loan.
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