What if I Still Have a Mortgage and Want a Reverse Mortgage?
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Many people who still owe money on their first or second mortgage believe that they will not be able to qualify for a reverse mortgage. This is not true. Even if you have an existing mortgage, you may still be eligible for a reverse mortgage. Of course, whatever funds you received from the reverse mortgage would first have to be applied to pay off your existing mortgage(s).

Homeowners 62 and older who owe only small balances on their current mortgage(s) and are currently living in their home are eligible to apply for HUD’s reverse mortgage program. This program allows a borrower to use the equity in their homes and choose from many different payment plans.

You can choose tenure which calls for equal monthly payments for as long as the borrower lives in the home as their primary residence. The term option is similar and calls for monthly payments in equal amounts for a set number of months.

The line of credit option allows you to take payments when you want to in the amount that you want to until your line of credit is exhausted. Modified tenure is a combination of the line of credit and monthly payments for as long as you are in your home. Modified term involves combining a line of credit with monthly payments for only a set number of months.

The loan and loan payment option that will work best for you depends on how much you still owe on your current mortgage. Your lender and reverse mortgage counselor will be better able to explain your options based on your specific situation.

The Home Keeper reverse mortgage has an interesting feature in that not only can you use it to pay off an existing mortgage, but you could actually use it to buy a new home and then apply a reverse mortgage all in one financial transaction. This eliminates a new monthly mortgage and enables you to keep any proceeds from the sale of a previous home. This could be a good option for a homeowner who wants to sell their current home in order to downsize or move to a more desirable location.

The bottom line is that just because you have current debt on your home, you are not necessarily ineligible for a reverse mortgage. With so many different reverse mortgage options available, there is bound to be one that will work for you current situation. You can potentially use a new reverse mortgage to pay off your current debt or mortgage. Then a new lien will be placed on your home, but as with any home loan, you will remain the actual owner of the home. The lender that you select will then be responsible for managing any future payment options that you may have chosen.

Remember that the key to getting the right loan is educating yourself on the options available and then finding the right lender. You can begin your search for the right reverse mortgage for your situation today.

Learn more about Reverse Mortgages >>