Tricks and tips to help you know if you qualify for a reverse mortgage.
Reverse Mortgages are growing in popularity in recent years as a source of retirement income for seniors, as an addition to social security and other retirement plans. They can also be very helpful in helping to deal with unexpected medical expenses. The money is usually tax free and there are usually no restrictions on income.
How does a reverse mortgage work?
A reverse mortgage is a loan where you convert some of your home equity directly into cash. With a regular mortgage, you pay money to the bank on a monthly basis. In a reverse mortgage, the bank pays you money, while you continue to live in your house. Usually no payment is required until the residents no longer live in the home. Since there are no monthly payments to make, your income level usually has no effect on your ability to get a reverse mortgage. There are also no restrictions on how you use the money. There are many different payment plans available with a reverse mortgage. The money can be either given in one lump sum, or monthly installments.
What sort of people can qualify for a reverse mortgage?
In order to qualify, you need to be 62 years of age or older. You need to own a home, and if you have a mortgage on the home, it needs to be low enough to be repaid with the money from your reverse loan at closing. You are also usually required to live in the residence so It’s not possible to get a reverse mortgage on a second home.
When and how is the loan repaid?
The loan will be due when the last living borrower passes on, sells the house, stops living there for 12 consecutive months, or lets the property accumulate damage and lose it’s value. In the event that the borrower passes, any heirs will have 6 months to exercise a variety of options to keep the property, including using a standard mortgage to pay the money back, or selling it.
Related posts: