AZ Reverse Mortgages has educated          many consumers about the powerful         benefits of reverse mortgages.                Some Important questions
	How do I know if I qualify?    A reverse mortgage enables older homeowners (62+) to convert part of the equity in their     homes into tax-free income without having to sell the home, give up title, or take on a new    monthly mortgage payment. The reverse mortgage is aptly named because the payment stream    is “reversed.” Instead of making monthly payments to a lender, as with a regular mortgage, a    lender makes payments to you. Below are some common questions asked by consumers about    reverse mortgages.         How Much Money Can I Get?    The amount of funds you are eligible to receive depends on your age (or the age of the    youngest spouse in the case of couples), the appraised home value, interest rates, and in the     case of the government program, the lending limit in your area. In general, the older you are     and the more valuable your home (and the less you owe on your home), the more money you     can get.            Does My Home Qualify?        Eligible property types include single-family homes, 2-4 unit properties, manufactured homes    (built after June 1976), condominiums, and townhouses. In general, cooperative housing is    ineligible. However, some lenders have developed private programs that lend on co-ops in     New York.
	What are My Payment Plan Options?    You can choose to receive the money from a reverse mortgage all at once as a lump sum, fixed    monthly payments either for a set term or for as long as you live in the home, as a line of credit,    or a combination of these. The most popular option – chosen by more than 60 percent of    borrowers – is the line of credit, which allows you to draw on the loan proceeds at any time.           Does the unused balance in the line of credit option          have a growth feature?    Does that mean I'm earning interest? No, you're not earning interest like you do with a savings    account. The growth factor, which is equal to roughly the interest that you're being charged,     takes into consideration that your home has appreciated in value over the past 12 months and     that you are one year older.          How Does the Interest Work on a Reverse Mortgage?        With a reverse mortgage, you are charged interest only on the proceeds that you receive.    Most reverse mortgages charge a variable interest rate (although fixed rate products are    entering the marketplace) that is tied to an index, such as the 1-Yr. Treasury Bill or the    London Interbank Offered Rate (LIBOR), plus a margin that typically adds an additional     one to three percentage points onto the rate you're charged. Interest is not paid out of your    available loan proceeds, but instead compounds over the life of the loan until repayment occurs.         Are There Any Special Requirements to Get a Reverse Mortgage?       As long as you own a home, are at least 62, and have enough equity in your home, you can    get a reverse mortgage. There are no special income or medical requirements.           What If I Have An Existing Mortgage?    You may qualify for a reverse mortgage even if you still owe money on an existing mortgage.    However, the reverse mortgage must be in a first lien position, so any existing indebtedness    must be paid off. You can pay off the existing mortgage with a reverse mortgage, money    from your savings, or assistance from a family member or friend.             For example, let's say you owe $100,000 on an existing mortgage. Based on your age,    home value, and interest rates, you qualify for $125,000 under the reverse mortgage    program. Under this scenario, you will be able to pay off ALL the existing mortgage and still    have $25,000 left over to use as you wish.   If, however, you only qualify for $85,000, then you    would need to come up with $15,000 from your own savings to get the reverse mortgage. Even    then, all the money from the reverse mortgage will have been used to pay off the existing    mortgage. On the other hand, you won't have a monthly mortgage payment anymore.    If you find yourself in a deficit situation where you don't have enough money to pay off the    existing mortgage, you may use funds from a grant or gift from a family member or friend to    cover the gap, but you cannot incur a new debt obligation (i.e., loan).        What Is the Service Fee Set-Aside?     Under the FHA HECM program, you are charged a monthly servicing fee that ranges from    $30-$35 to manage your account once the loan closes. The SFSA is an estimate of what the    total servicing fees will be over the life of the loan, by multiplying your life expectancy    (converted from years into months) multiplied by either $30 or $35.       Although it's not considered a closing cost, the SFSA can equal several thousand dollars,     which is deducted from your available loan proceeds. You do not have access to that     money, nor do you earn interest.             Will I Lose My Government Assistance If I Get a Reverse Mortgage?       A reverse mortgage does not affect regular Social Security or Medicare benefits. However,     if you are on Medicaid, any reverse mortgage proceeds that you receive must be used     immediately. Funds that you retain would count as an asset and could impact Medicaid     eligibility. For example, if you receive $4,000 in a lump sum for home repairs and spend it     all the same calendar month, everything is fine. Any residual funds remaining in your bank     account the following month would count as an asset. If the total liquid resources      (including other bank funds and savings bonds) exceed $2,000 for an individual or $3,000     for a couple, you would be ineligible for Medicaid.  To be safe, you should contact the      local Area Agency on Aging or a Medicaid expert.             Why Do I Need to Get Counseling?          Counseling is one of the most important consumer protections built into the program. It     requires an independent third-party to make sure you understand the program, and review     alternative options, before you apply for a reverse mortgage. You can seek counseling from     a local HUD-approved counseling agency, or a national counseling agency, such as     AARP (800-209-8085), National Foundation for Credit Counseling (866-698-6322), and     Money Management International (877-908-2227). Counseling is required for all reverse     mortgages and may be conducted face-to-face or by telephone. By law, a counselor must      review 1. Options, other than a reverse mortgage, that are available to the prospective      borrower, including housing, social services, health and financial alternatives; 2. Other home     equity conversion options that are or may become available to the prospective borrower,      such as property tax deferral programs; 3. The financial implications of entering into a reverse     mortgage; and, 4. The tax consequences affecting the prospective borrower’s eligibility under     state or federal programs and the impact on the estate or his or her heirs.              When Do I Pay Back My Loan?          No monthly payments are due on a reverse mortgage while it is outstanding. The loan is     repaid when you cease to occupy your home as a principal residence, whether you (the last     remaining spouse, in cases of couples) pass away, sell the home, or permanently move out.     The amount owed can never exceed the value of your home. Furthermore, if the home is     sold and the sales proceeds exceed the amount owed on the reverse mortgage, the excess     money goes to you or your estate.       Under What Circumstances Should I Not Consider a Reverse Mortgage?      Because of the upfront costs associated with a reverse mortgage, if you intend to leave      your home within 2-3 years, there may be other less expensive options to consider, such     as home equity loans, no-interest loans or grants that may be offered by your county     government or a local non-profit to repair your home, or a tax deferral program, if you're     having problems paying your property taxes. Also, if you want to leave your home to your     children, then you should consider other options, because in many cases, the home is sold to     pay back a reverse mortgage.           How Can I Use the Proceeds from a Reverse Mortgage?       The proceeds from a reverse mortgage can be used for anything, whether its to supplement     retirement income to cover daily living expenses, repair or modify your home (i.e., widening     halls or installing a ramp), pay for health care, pay off existing debts, buy a new car or take      a "dream" vacation, cover property taxes, and prevent foreclosure.

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