Editor’s Note: The stock market’s heightened volatility this year is a painful reminder of how quickly Wall Street can go from bullish to bearish. When that happens, taking withdrawals from your retirement account after its value has declined can put you at risk of running out of money. During times like these, having a reliable income source that is not dependent on stock market growth can be valuable. To that end, I recently sat down with Mark McVearry, a senior loan officer with Acre Mortgage & Financial, to discuss Reverse Mortgages.

Q: Hi Mark, thank you for taking the time to speak with me today. Can you tell me a little bit about your background and what got you into the mortgage business?

A: I studied Finance and Economics in college, and after graduating, I had a few friends working in the mortgage business, so they convinced me to come in for an interview. I liked what I heard so I gave it a shot, and it turned out to be a great fit. More than 30 years later, I’m still in the business and for the majority of the time my focus has been on Reverse Mortgages.

Q: I’m sure most of my readers are familiar with how a conventional mortgage works, but can you explain what a Reverse Mortgage is?

A: A Reverse Mortgage is a loan for homeowners 62 and older. It lets you convert a portion of your home’s equity into tax-free proceeds without selling your home, giving up ownership, or making monthly mortgage payments. You still own your home, and the loan is repaid later when you sell the home, move out, or pass away.

Q: Are they safe?

A: Yes, Reverse Mortgages are safe. The federal Reverse Mortgage is insured and regulated by the Federal Housing Administration (FHA), which sets strict guidelines to protect homeowners. You’re also required to complete third-party counseling before moving forward, so you can make sure you are making an informed choice.

Q: Does the borrower still own their home with a Reverse Mortgage?

A: Yes, you still own your home. A Reverse Mortgage is simply a lien just like any traditional mortgage. If your plans change down the road, you’re free to sell the home, pay off the loan, and keep any remaining equity. Nothing about this loan takes away your ownership or control.

Q: Can you still leave your home to your heirs? Yes. When the loan ends, your heirs can choose to repay the loan and keep the home or sell the home and keep any remaining equity after the Reverse Mortgage is repaid.

Q: How does someone qualify for a Reverse Mortgage?

A: To qualify for a Reverse Mortgage, at least one homeowner on the title must be 62 or older. The home must be your primary residence, and there needs to be enough equity to pay off any existing mortgage using the Reverse Mortgage proceeds.

Q: How much money can someone get from a Reverse Mortgage

A: The amount you can receive from a Reverse Mortgage depends on your age, your home’s appraised value, and current interest rates. The older you are, the more you can receive.

A: How can the money from a Reverse Mortgage be used?

A: First, you must use the money from the Reverse Mortgage to pay off any liens on the home. After that, the remaining funds are yours to use however you choose. Some people use the money to protect their investment portfolio, pay off credit cards or medical bills, make home improvements, cover in-home care, or simply ease the pressure of monthly expenses.

Q: How can you receive the money from a Reverse Mortgage?

A: You can receive your Reverse Mortgage funds in several ways: a lump sum (with some limits on how much is available upfront), a line of credit you can draw from as needed, a monthly check to you (either for life or a set term), or a combination of these. You can also adjust your payment option later if your needs change.

Q: How is the federal government involved with a Reverse Mortgage?

A: Reverse Mortgages are federally insured by the FHA (Federal Housing Administration). That means if your home ends up being worth less than what’s owed when the loan ends, neither you nor your heirs are responsible for the difference. The FHA will cover the shortfall. It’s an important protection for both you and your family.

Q: What happens when one spouse dies, and the surviving spouse wants to stay in the house?

A: If your spouse is listed as a borrower on the Reverse Mortgage, which is mandatory, they can remain in the home with no change to the loan even if they weren’t 62 when the loan began.

Q: Can someone get a Reverse Mortgage if they have an existing mortgage?

A: Yes. In fact, one of the most common reasons people get a Reverse Mortgage is to pay off their existing mortgage and eliminate monthly payments. It can free up a large portion of your income each month without having to sell your home.

Q: Can a Reverse Mortgage be used to buy a home?

A: Yes. You can use a Reverse Mortgage to purchase a new home, often as part of a downsizing or relocation plan. It lets you buy the home you want without taking on a monthly mortgage payment.

Q: Can a Reverse Mortgage be paid down or paid off early?

A: Yes. While you’re never required to make payments on a Reverse Mortgage, you can choose to pay it down or pay it off at any time. Whether it’s a little here and there or a full payoff, the choice is entirely up to you.

Q: Does that mean that someone could take out a Reverse Mortgage now while real estate values are high, and then pay it down later once their stock market investments have fully recovered?

A: Yes. There are no prepayment penalties, so you can take advantage of today’s higher home values now and choose to pay down or pay off the loan later, like when your investments recover. You’re in control, and you’re never locked into monthly payments.

Q: If you spend all the money available under a Reverse Mortgage, does the loan become due?

A: No. The loan doesn’t become due just because the available funds are used.

Q: Do you need perfect credit to qualify for a Reverse Mortgage?

A: No, perfect credit is not required. There are no minimum credit score requirements.

Q: Have Reverse Mortgages changed since they were originally introduced?

A: Yes, they’ve changed significantly. Like any new loan, Reverse Mortgages weren’t perfect when they were first introduced. Over time, significant rules and protections have been added to make them safer and more transparent.

Q: About how long does the Reverse Mortgage process take, and will the borrower know all the costs and fees before committing to the loan?

A: It usually takes 30–45 days from application to closing. Yes, we will provide a clear breakdown of all costs and fees, so there are no surprises.

Q: For readers interested in finding out more about Reverse Mortgages, what is the first step?

A: If don’t already have a mortgage broker, feel free to contact me directly. I’ll answer your questions and help you see if a Reverse Mortgage makes sense.

Editor’s note: Investing Daily has no business relationship with Mark McVearry or Acre Mortgage

Mark McVearry

NMLS #27670 Senior Loan Officer, Acre Mortgage & Financial NM

410-788-7070

mark@markmcv.com

www.markmcv.com