Costs, Taxes & Repayment

Closing costs can be paid out of the loan proceeds or with your own funds at closing.  However, appraisal, credit report and counseling fees may apply during the application process.

Tax Consequences
Reverse mortgage proceeds are typically considered loan advances and are not taxable. Similarly, your Social Security or Medicare benefits should not be affected. If you receive SSI, Medicaid or other public assistance, your loan advances are typically counted as "liquid assets" if kept in an account past the end of the calendar month in which you receive them. You must be careful not to let your total liquid assets become greater than these programs allow. Consult your tax advisor.

Repayment Options
The loan is repaid when the home is sold or the estate is settled. The repayment amount of a reverse mortgage cannot exceed the home's value. In the event the home sells for less than the loan amount, your heirs are not responsible for the balance.

Read on to learn more about this unique loan type, and visit our frequently asked questions for even more helpful information.