Payment Options

Homeowners whose circumstances change can restructure their payment options for a nominal fee of $20. HUD’s reverse mortgage program collects funds from insurance premiums charged to borrowers. Senior citizens are charged 2 percent of the home’s value as an up-front payment plus a .5% annual premium, which is paid out on a monthly basis for the life of the loan. These amounts are usually paid by the lender and charged to the borrower’s principal balance.

Payment Options:

• Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.

• Term – equal monthly payments for a fixed period of months selected.

• Line of Credit – unscheduled payments or in installments, at times and in amount of borrower’s choosing until the line of credit is exhausted.

• Modified Tenure – combination of line of credit with monthly payments for as long as the borrower remains in the home.

• Modified Term – combination of line of credit with monthly payments for a fixed period of months selected by the borrower.

More information on reverse mortgages and the specific programs available in your area can be found at the National Reverse Mortgage Association website, the AARP website or the HUD website on Reverse Mortgages.