WHAT EXACTLY IS A REVERSE MORTGAGE?

A reverse mortgage (CHIP mortgage) allows homeowners 55+ to access their home equity without making monthly payments, with repayment only required when the home is sold or you permanently move out.

Here’s how this unique mortgage product works 👇

1️⃣ What a reverse mortgage actually is

A reverse mortgage is secured against your principal residence.

✔️ no monthly payments required

✔️ interest is added to the balance

✔️ repayment happens once you leave the home

You keep full ownership of your property at all times.

2️⃣ How much you can borrow

Your age and home value determine the available loan amount.

✔️ older applicants qualify for more

✔️ higher home value increases the limit

✔️ funds can be lump sum or monthly

This flexibility helps retirees structure income in the way that suits them best.

3️⃣ Example of a typical payout structure

Borrowers can choose a combination of upfront money and monthly income.

✔️ e.g., $50,000 lump sum

✔️ plus $1,000 per month

✔️ for up to 140 months

The structure depends on your needs and overall eligibility.

4️⃣ You can remain in your home indefinitely

No payments are required as long as one applicant continues to live in the home.

✔️ applies even if one spouse moves to assisted living

✔️ snowbirds qualify if the home is primary residence

✔️ lender cannot force a sale

You maintain full control of the home and title ownership.

5️⃣ Basic eligibility requirements

Reverse mortgages are built for older homeowners.

✔️ minimum age 55 for all applicants

✔️ must be your principal residence

✔️ rental/income properties do not qualify

Both applicants must meet the age requirement if applying jointly.

6️⃣ Does the bank own your home?

No — ownership never transfers to the lender.

✔️ mortgage registered like any other

✔️ lender cannot take possession

✔️ you control when the home is sold

You remain on title with full legal ownership.

7️⃣ Will a reverse mortgage reduce your equity?

Reverse mortgages are designed to protect equity.

✔️ loan amounts are capped

✔️ home values often rise

✔️ equity typically remains

Most homeowners keep a significant portion of their equity long-term.

8️⃣ Costs to set up a reverse mortgage

There are standard setup fees similar to traditional refinances.

✔️ setup fee ($995–$1,495)

✔️ appraisal required

✔️ legal registration involved

All fees are disclosed upfront during the application process.

9️⃣ What if you already have a mortgage?

You can still qualify — the reverse mortgage simply pays off the existing balance.

✔️ eliminates monthly payments

✔️ reduces cash flow strain

✔️ simplifies retirement finances

This is a common strategy for homeowners preparing for retirement.

💬 Final Thought

A reverse mortgage can provide financial flexibility and stability for homeowners 55+ who want to age in place while accessing their home equity. It removes monthly payment pressure while allowing you to stay exactly where you are.

If you want a personalized breakdown of how much you could qualify for, The Frontline Mortgage Group will explain your options clearly and help you plan with confidence.