Maryland reverse mortgage applicants must meet the following requirements.

• You must be 62 years old or older.
• The home has to be your primary residence.
• The home must meet FHA minimum property standards.
• Homeowners have to maintain insurance and make property tax payments.
• You have to own the home or have a low mortgage balance.
• You cannot have delinquent federal debt.

There are no other income or credit requirements to qualify for a Maryland reverse mortgage. This makes it a popular option for seniors who have less than stellar credit but own a majority of their home’s equity.

Maryland reverse mortgages carry various costs and fees. They include:

• HECM Counseling Fee: The cost for the mandatory HUD counseling session varies.
• Origination Fees: Reverse mortgage origination fees are the cost to create the loan. They are capped at $6,000 for HECM loans.
• Closing Costs: Like a conventional loan, reverse mortgages have closing costs like taxes, appraisal fees, title searches, etc. The actual closing costs vary by loan.
• Mortgage Insurance Premium: The FHA requires that you pay a mortgage insurance premium on reverse mortgages. You pay a set fee during closing and annual fees for the loan term.
• Interest: Interest on reverse mortgages can be fixed or variable. This is how the bank makes money on your loan. It is determined by the current market interest rates.

Some fees can be rolled into the loan instead of being paid up front at closing. District Lending helps borrowers understand all costs associated with reverse mortgages so there are no surprises during closing.

A reverse mortgage impacts how much your heirs can inherit from the home, and they will be required to settle the affairs.

They must pay the loan within 30 days of assuming the property. Meeting with an attorney or HUD counselor can extend the repayment period up to six months.

The Consumer Financial Protection Bureau outlines the implications well.

• Heirs must repay the balance or 95 percent of the home’s appraised value. They will pay the lesser of the two amounts.
• The loan can be repaid from the home’s equity or the proceeds of the sale of the house.
• Any remaining equity will be turned over to the heirs.

Ultimately, your heirs will be impacted by the reverse mortgage.

Maryland reverse mortgages must be repaid if:

• The homeowner is no longer living.
• The home is sold.
• The home is no longer the borrower’s primary residence.
• The home no longer meets FHA requirements.

The loan can be due in any of these circumstances and must be repaid within 30 days.

Reverse mortgages in Maryland carry financial risks much like conventional loans. Failure to meet the terms of the loan can lead to foreclosure. The loan value may exceed the home’s value if too much equity is drawn upon.

District Lending can help educate Maryland homeowners on the risks and do their best to help mitigate them.