Reverse Morgage Explained - Finding a Reverse Mortage

So you are interested in a reverse morgage. The first thing we need to do is to understand what is a reverse mortage. A reverse morgage is a loan that enables home owners to convert part of their home equity into income without having to sell their home, give up title to it, or make monthly mortgage payments. In a reverse mortage the loan only becomes due when the borrower leaves his home, whether by death or otherwise.

This financial tool allows you to obtain cash from the equity in your house. You may continues to live in your house and you can use the money you receive for any purpose that you choose.

However this kind of loan is not for everyone. There are several requirements for eligibility. For one, only people that are 62 years of age and above are eligible. In addition, You must own and live in the home as a primary residence. In addition not every home qualifies, it must be of a type that qualifies for the program. So what are the homes that qualify for the program? the vast majority of single family homes qualify, as do most condominiums, town homes, 2-4 unit owner-occupied dwellings and manufactured homes. Note that your level of income and credit levels does not matter and does not play a role in this.

Reverse morgage comes with several benefits for qualified people. You are getting cash while still retaining the ownership of your home for life. The remaining equity will be passed on to your heirs.

The cash you receive from a reverse mortage is tax-free. What can you do with the money you receive? anything you want, you are not limited in the use of money received whatsoever. You can use it for In-home care, home repairs and improvements, paying off an existing mortgage, education of grandchildren, hospital and health care costs, paying off taxes and credit card debt, buying a second home, and travel.

One big advantage is the fact that you do not have to make payments as long as you continue living in your home. In fact, this is the number one reason that people choose to use this financial tool. Statistics show us that the vast majority of borrowers use it to pay off their current loans in order to eliminate their house payments.

A reverse mortgage is a non-recourse loan meaning that there is no personal liability to you or your Heirs - no matter what - your lender can only look to your home's value for repayment (both Homeowner and Lender are insured against loss). You can not be forced from your home, the loan does not have to be repaid until after you die or permanently willingly vacate your home.

This financial tool is relatively new to the market. It has been around for a number of years now and has had a chance to settle in. Although the market is regulated it is extremely important that you fully understand how a reverse mortgage works so as to make sure that you finish up getting the best deal available from a qualified lender.

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