Question 1

How do I qualify for a reverse mortgage in Texas?

Accepted Answer

To qualify for a reverse mortgage, you must be at least 62 years old and own your home. You must have sufficient equity to pay off any outstanding balances, and the home must be your principal residence. All applicants go through a financial assessment to determine their capacity and willingness to meet financial obligations.

Question 2

How much money can I get from a reverse mortgage?

Accepted Answer

The amount available depends on your age at closing, your home's appraised value, the total amount of existing liens, and current interest rates. HUD limits borrowers to using 60% of available funds in the first year. The remaining funds become accessible beginning in year two.

Question 3

How do I receive money from a reverse mortgage?

Accepted Answer

You can receive your money as a lump sum, a line of credit, monthly payments, or a combination of all three. In the first year, disbursements cannot exceed 60% of the Principal Limit. After the first year, the available line of credit or monthly payments will be increased when applicable.

Question 4

What does a reverse mortgage cost?

Accepted Answer

Costs include an origination fee, FHA mortgage insurance premium (MIP), appraisal fee, flood certification fee, document preparation fee, and title, settlement, and escrow fees. All costs are clearly disclosed on the Loan Estimate. A monthly servicing fee may also apply.

Question 5

What are the FHA Mortgage Insurance Premium charges on a reverse mortgage?

Accepted Answer

FHA requires a Mortgage Insurance Premium (MIP) collected at closing and throughout the life of the loan. The upfront MIP is calculated using your home's appraised value or a maximum of $1,249,125 (the 2026 national HECM lending limit) and is charged at closing. Ongoing FHA insurance premiums are calculated using each month's outstanding loan balance.

Question 6

Is counseling required before getting a reverse mortgage?

Accepted Answer

Yes. Counseling with an independent, HUD-approved counselor is required before getting a reverse mortgage. The lender must receive the counseling certificate before the loan can close. Contact your Mortgage Loan Originator or your local HUD office to find a counselor near you.

Question 7

Do I get taxed on the money I receive from a reverse mortgage?

Accepted Answer

The proceeds from a reverse mortgage are typically not subject to individual income tax. However, you should consult your tax advisor for guidance specific to your situation.

Question 8

Do I have to make monthly payments on a reverse mortgage?

Accepted Answer

No. A reverse mortgage was designed so borrowers do not have to make monthly mortgage payments. Typical upfront costs include the appraisal and HUD-approved counseling. There may be a monthly servicing fee, which is financed and added to the loan balance rather than paid out of pocket.

Question 9

What is a HECM reverse mortgage?

Accepted Answer

A HECM (Home Equity Conversion Mortgage) is the FHA-insured reverse mortgage program authorized by Congress and signed into law in 1988. It allows eligible homeowners 62 and older to convert a portion of their home equity into tax-free income or a growing line of credit while continuing to live in their home.

Question 10

What is a HECM for Purchase?

Accepted Answer

A HECM for Purchase allows seniors 62 and older to buy a new primary residence using a reverse mortgage. You can purchase a home with a lower down payment and have no required monthly mortgage payments, helping you preserve more of your retirement assets.

Question 11

What is a HomeSafe Second reverse mortgage?

Accepted Answer

The HomeSafe Second is a proprietary reverse mortgage product that allows eligible seniors to access additional home equity as a second lien, without refinancing their existing first mortgage. It can be a good option for homeowners who have a low-rate first mortgage they want to keep while still accessing their equity.

Question 12

What is a jumbo reverse mortgage?

Accepted Answer

A jumbo reverse mortgage is a proprietary (non-FHA) reverse mortgage designed for homeowners with higher-value properties that exceed the FHA lending limit of $1,249,125. It allows those homeowners to access a larger portion of their home equity than a standard HECM would allow.

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