Financial Services Help

What Everyone Needs to Know About Reverse Mortgages

A Reverse Home Mortgage Can Turn Your Home Equity into a steady income

A Reverse Mortgage or Reverse Home Mortgage is a great financial product for seniors to use in their retirement plan.

People consider selling their homes or taking loans or borrowing against it get cash. This is commonplace. But it could lead to making loan payments on a equity loan

A Senior can get all the great perks of an equity loan with a reverse mortgage, but they can still keep the “occupancy or ownership” of the home PLUS as a bonus, you don’t need to pay the loan back! Reverse mortgages can be set up so that you typically would not have to pay a penny back until you sell your home, pass away(die), or move out. Most reverse mortgage are not dependent on health, age, credit level, income level, or anything else that could make applying for a loan difficult.

Typically, one can “convert” their regular mortgage to a reverse mortgage easily. In fact, most banks would love fo you to do this since it’s a great benefit to them. Once you convert it, you have no restrictions on how can you use the cash.

It’s a perfect way to stay in your home and get cash, if you have allot of equity

What’s is the Catch??

There is no “catch”. The principle is that you are not required to make any repayments until the term of the loan is up. Interest is accrued over the length of your loan, but is included in the final repayment amount. As for how you spend it, we leave that entirely up to you. If you think you may live in the house for longer that five years, then a reverse mortgage may not be for you.

Requirements

To qualify for a reverse mortgage in the United States, the borrower must be at least 62 years of age. There are no minimum income or credit requirements, but there are other requirements and homeowners should make sure that they qualify for the loan before they invest significant time or money into the process. For most reverse mortgages, the money can be used for any purpose; however, the borrower must pay off any existing mortgage(s) with the proceeds from the reverse mortgage and, if needed, additional personal funds. A pending bankruptcy which has not been finalized may, however, slow the process. Some types of dwellings, such as lower-value mobile homes, do not qualify. Before borrowing, applicants must seek free financial counseling from a source which is approved by the Department of Housing and Urban Development (HUD). The counseling is a safeguard for the borrower and his/her family, to make sure the borrower completely understands what a reverse mortgage is and how one is obtained.