What is a Fannie Mae reverse mortgage? How do I know if a Fannie Mae reverse mortgage is the right choice for me?
Reverse mortgages are loans allowing homeowners access to the built-up equity in their home. These funds provide for financial independence or needed cash in the event of emergencies. A reverse mortgage can also provide additional income to supplement retirement benefits.
What are some advantages of a reverse mortgage?
There is no monthly payment of the loan as long as conditions of the loan are met. It provides tax-free access to a significant amount of funds. Borrowers live in the house and maintain ownership. The lender accepts market value at time of sale as full payment for the debt.
What are some of the responsibilities and conditions of a reverse mortgage?
Borrowers must be at least 62 years of age and own the home free, or substantially free of any debt. The amount available may be less than the total value of the home. The loan balance rises over time. There are fees and expenses added to the loan. Borrowers must use the home as their principle residence. If the borrower vacates the home for more than one month in a twelve month period, sells the home or dies, the debt becomes due. The borrower must maintain the home and pay all property taxes, repairs and insurance costs.
How do I decide if a Fannie Mae reverse mortgage is right for me?
Fannie Mae requires potential borrowers to attend a counseling session to learn about the loan and decide if it is appropriate. Borrowers should plan for the future. Decide what needs are current and plan for contingences. Study income and cash flow statements. Then, use these to budget present and future needs as well as wants.
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