There are many questions that run through one’s mind when considering a reverse mortgage. Do I still own the home? With a reverse mortgage, what do I have to pay? What happens when I die? The answers to these questions are actually very straightforward and may even be surprising.
What Is A Reverse Mortgage?
Reverse mortgages are loans that are offered to homeowners over the age of 62. They allow the consumer to retain ownership of the home and, as long as they live in the property, make no monthly payments toward the loan amount. Instead, the equity in the home is used. This allows seniors to remain in the home while receiving tax-free income they can use on necessities. Income and credit ratings are not a factor with reverse mortgages. Instead, the homeowner’s age and the value of the home are considered.
With A Reverse Mortgage, What Do I Have to Pay?
One of the most common questions asked by an individual considering a reverse mortgage is, “What are my responsibilities? With a reverse mortgage, what do I have to pay?” Because so many consumers don’t understand reverse mortgages completely it’s easy to see why this question is so typical. With a reverse mortgage, the homeowner is not required to pay any monthly amount toward the loan at all. Instead, cash is drawn from the equity of the home. This allows seniors to remain in their home and use their equity without selling or acquiring a line of credit, which simply requires an additional monthly payment on top of the mortgage. Reverse mortgages provide tax-free income to the homeowner instead of requiring monthly payments.
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