Limitations of a Reverse Mortgage
As nice as it is that there are no restrictions on how to use the proceeds of your reverse mortgage, the government does not allow you to have two reverse mortgages at the same time. You can only hold one reverse mortgage at any time, and if you do insist in taking another reverse mortgage, then you have to pay the first reverse mortgage off in full before reverse mortgage lenders can entertain your application.
Reverse Mortgage Restrictions
Reverse mortgages are designed for your primary residence only. A primary residence is a home where you live for over six months during the year. Vacation homes, cottages, or other types of secondary homes do not qualify for a reverse mortgage. This rule is placed into effect to safeguard some abusive corporations from obtaining a reverse mortgage out of their commercial properties.
Consequences of Leaving Your Primary Residence
If it so happened that you decided to stay at a nursing home for more than six months rather than your primary residence, then reverse mortgage lenders may consider that a move. The major consequence of move, as set in the contract of a reverse mortgage, is for the borrower to pay the amount of loan in full. So if you do not wish to worry about this matter in the future, it is best to consider your needs and income before signing any reverse mortgage deal with anyone.
There are more rules and restrictions that apply to reverse mortgage, so it is best to consult a reverse mortgage counselor before deciding to take advantage of this type of mortgage. It is better to do a thorough research on the advantages and disadvantages of a reverse mortgage before jumping into it. Only in doing so can you save yourself from future worries and problems.
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