Reverse Morgage Explained
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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.
Please note that future
updates to this site will include the following topics: hsbc
home rates, option one lender, suntrust emc
mortgag calculation, sub prime american rates,
canada amortization, buy to let reverse morgage advice,
canadian interest rate, first national
advisor, 30 year new century , commercial fixed rate
morgages.
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