What Is A Reverse Mortgage And How Can It Benefit You?
Retirement is supposed to be all about relaxing, having fun and doing some of the things that you weren’t able to do while you were working. All of those hopes can be washed away if you still have to pay that dreaded mortgage payment. For some, it might seem like they will be paying the mortgage company until the day they die. Fortunately, there is a great alternative. It is called a reverse mortgage. What is a reverse mortgage? Below is some reverse mortgage information.
When an older couple decides to take out a reverse mortgage, they then begin to receive money from their bank instead of paying the bank. This process can be even more beneficial to those homeowners that already own their home free and clear. To be qualified to apply for a reverse mortgage, the applicant needs to be at least 62 years old.
During a reverse mortgage, the lender will begin to make payments to the owner based on the value of the home. One downside to this type of mortgage is that the money for the mortgage is due very soon after the owner passes away. This can create some stress for those that inherit the home. Usually, the heirs will need to sell the home to cover the balance of the loan.
What Is A Reverse Mortgage Process?
Finding out all the reverse mortgage information you can before deciding if it is right for you and your situation is extremely important. This program is especially helpful to those seniors that have a house that is worth a lot of money but they have no cash flow.
This type of mortgage is available through a number of sources. There are private lenders, local and state governments and federal government programs that offer this type of mortgage to those who qualify. The most popular type of reverse mortgage is the Home Equity Conversion Mortgage (HECM). You can use an online reverse mortgage calculator to try and estimate what you could possibly get in payments. Keep in mind that a reverse mortgage calculator is only a tool to use and is not a guarantee of what you could get.
There are many advantages that can also come with these types of mortgages. The first is that you don’t have to have good credit because no credit check is necessary since the lender will be making payments to the borrower. On the other hand, as the borrower it would be a good idea to do some kind of check on the lender to see how their credit worthiness is.
Another advantage of these reverse mortgages are the multiple payment options. You can opt to receive your payment in a lump sum, as a cash advance or possibly get a line of credit. The line of credit is a good option because each month your cash amount will increase by whatever the monthly rate happens to be.
If you have loved ones that are supposed to inherit the home in which you are interested in getting a reverse mortgage on, it would be a wise decision to discuss the prospect with them before going through it. They need to be fully aware of the situation so that when the time comes they know that the mortgage will need to be paid back soon after you pass away.
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