A LOOK INTO REVERSE MORTGAGES

If you are currently looking into getting a reverse mortgage there are a couple things you should be aware of. A reverse mortgage allows a borrower to convert the equity they have in their home into cash. The amount of money received is based upon the homeowner’s amount of equity. Therefore the less you owe on your mortgage, the more you can potentially borrow. The most common reverse mortgage loan currently offered is the Home Equity Conversion Mortgage (HECM) which is insured by the federal government. This type of loan is generally offered through mortgage lenders and banks can be used for whatever purpose the borrower wishes.

There are no income or health restrictions that need to be met in order to qualify like there are with other home loans. In fact, the only requirements are that you be at least 62 years of age and live in your home. A reverse mortgage also requires that the borrower stays in his or her home for as long as they live. The borrower does not have to pay back the money to the lender, until they pass away, move out, or sell their home.

The mortgage can be paid through either a lump sum, monthly payments, or drawn from a credit line. With a lump sum payment you get your total eligible amount upfront. With a monthly payment account or credit line from which you can draw up to the value of your loan.

While many senior homeowners choose a reverse mortgage because of the financial stability that it provides, this particular mortgage loan isn’t right for everyone. If you are thinking of getting the loan, be sure to get professional and legal advice before you make your decision.