Does the bank own my house?

NO!  The bank does not own your house.  A reverse mortgage is merely a lien against the property similar to a regular forward mortgage.  Title remains in your name and you are still responsible for property taxes and insurance. 

Can I be forced to move?

As long as you continue to live in the house, maintain the property, remain current with taxes and insurance, and abide by the terms of the loan, you cannot be forced to move. 

Will getting a reverse mortgage affect my Social Security, Medicare, or pension benefits?

No.  A reverse mortgage simply converts your equity into cash the proceeds are not considered income, in most cases, and should not affect these benefits.  Consult with your financial advisor to be sure. 

Will getting a reverse mortgage affect my SSI or Medicaid benefits?

No.  A reverse mortgage will not affect these or most other means-tested benefits as long as the monthly cash advances are fully spent every month and not accumulated.  Programs vary by state so I advise you to check with the local Area Agency on Aging and your financial advisor.

Will I have any tax liability for the reverse mortgage proceeds?

Currently, the Internal Revenue Service treats monies received from a reverse mortgage to be loan advances and not taxable income.  For your specific situation, consult your tax advisor.

Can the interest charged on my reverse mortgage be deducted for tax purposes?

The interest accrues and is deductible when the loan balance and interest is repaid - when the borrower permanently leaves the property.  For your specific situation, consult your tax advisor.

Who shouldnt get a reverse mortgage?

In most cases, a reverse mortgage would not benefit someone who plans to move out of their house within five years. 

What happens when the equity runs out?

If you elect to receive your reverse mortgage proceeds as a monthly payment, you will continue to receive those payments for as long as you live in the house, maintain the property, and remain current with property taxes and insurance.  Even if you live in the house until you are 120 years old and the equity is exhausted, you will continue to receive the monthly benefits of the reverse mortgage. 

What if I owe more than my home is worth?

All reverse mortgages are "non-recourse" loans.  This means that you can never owe more than the value of your home - regardless of how much your loan balance has grown.  For the most common type of reverse mortgage (HECM), FHA would pay any amount owed on the reverse mortgage above the value of your home by virtue of the federal guaranty. 

Why are the fees so high?

A reverse mortgage is truly a unique product and it is difficult to compare its fees on an apples-to-apples basis.  No other financial product lets you access the equity in your home with (i) no monthly payments required, (ii) no income, credit, or medical qualifications, and (iii) an open ended maturity date (i.e. when you move or sell your house).  That being said, most of the costs (such as title insurance, appraisal, recording fee, etc) are the same as a regular mortgage and nearly all of the fees are financed by the reverse mortgage.  Only a small amount (under $500) for the appraisal, termite inspection, and application fee generally needs to be paid out of pocket prior to closing.  Also, the longer you live in the home, the more reasonable these initial fees become as they are spread out over the term of the reverse mortgage. 

How much money can I get? 

This depends on your age, the market value of the home, any existing liens against the property, and the interest rates at the time of the loan.  The website for Financial Freedom (www.financialfreedom.com) has a useful calculator that you can use to get an idea of how much money you might qualify for. 

Can a reverse mortgage be taken out if there is already a conventional mortgage on the home?

Yes, but any existing mortgages must be paid off at closing.  The proceeds from the reverse mortgage may be used for that purpose.

What types of homes do not qualify for a reverse mortgage?

Generally, vacation homes or other secondary residences, mobile or manufactured homes not attached to a permanent foundation, rental properties of more than four units and homes on leased lands do not qualify.