"If you are a senior homeowner struggling to make ends meet HERE you'll discover how you can avoid
the hidden 'booby traps' of reverse mortgage loans..."
Did you know that if either taxes or insurance lapse, it could result in a default on the reverse mortgage?
If you are having a hard time making ends meet, a reverse mortgage can be an attractive option for you. Reverse mortgage helps many retirees cope with their financial difficulties and more importantly, helps them to have a way to retain their independence and dignity.
A reverse mortgage allows someone aged 62 or over to borrow money against the value of their home. For most reverse mortgages, the money can be used for any purpose. You may decide to do some renovations around the house, secure some investments, go on a holiday or simply buy a new car.
With a reverse mortgage, a senior homeowner will receive money for their home equity from a lender without having to make repayments for as long as they live in their home. Usually it only needs to be repaid when one sells the house, permanently moves out or passes away.
Things your banker doesn't want you to know.
A significant drawback to reverse mortgages are the high upfront costs. This upfront cost is tempered by the lower interest rate over time, but some seniors choose other options to draw on their home equity, particularly if they don't plan to remain at the property more than five years.
There are no minimum income or credit requirements, but there are other requirements and senior homeowners should make sure that they qualify for the loan before they invest significant time or money into the process.
The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.
What's the difference between a reverse mortgage and a bank home equity loan?
With a traditional second mortgage, you income versus debt ratio must be sufficient for you to qualify for the loan, and you are required to make monthly mortgage repayments.
The reverse mortgage is available regardless of your current income and you don't have to make any monthly payments, because the loan is not due as long as the house is your principal residence.
With a reverse mortgage you cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment."
What you need to watch out for is that since interest is applied to your loan - the debt escalates.
What about your heirs?
When you sell your home, you or your estate will repay the cash you received from the reverse mortgage plus interest and other fees, to the lender. The remaining equity in your home, belongs to you or to your family.
If a property has increased in value after a reverse mortgage is taken out, it is possible to acquire a second (or third) reverse mortgage over the increased equity in the home. But in certain countries (including the United States), a reverse mortgage must be the only mortgage on the property.
The HECM is the most popular reverse mortgage because it generally offers the highest amount of money to homeowners of homes valued under $400,000. For homeowners of higher-valued homes, a Jumbo reverse mortgage will usually enable the homeowner to borrow significantly higher amounts of money.
The cost of getting a reverse mortgage from a private sector lender may exceed the costs of other types of mortgage or equity conversion loans. Exact costs depend on the particular reverse mortgage program the borrower acquires.
Keep in mind that many reverse mortgage contracts are confusing and hard to interpret, so you might want to seek out assistance of a qualified professional.
You will find many other valuable and practical tips, links and guides on this website, to help you learn more about reverse mortgages and choose the best loan for your needs. We hope this website will prove valuable to you - thanks for visiting our website. Good luck and good health to you.
If you are having a hard time making ends meet, a reverse mortgage can be an attractive option for you. Reverse mortgage helps many retirees cope with their financial difficulties and more importantly, helps them to have a way to retain their independence and dignity.
A reverse mortgage allows someone aged 62 or over to borrow money against the value of their home. For most reverse mortgages, the money can be used for any purpose. You may decide to do some renovations around the house, secure some investments, go on a holiday or simply buy a new car.
With a reverse mortgage, a senior homeowner will receive money for their home equity from a lender without having to make repayments for as long as they live in their home. Usually it only needs to be repaid when one sells the house, permanently moves out or passes away.
Things your banker doesn't want you to know.
A significant drawback to reverse mortgages are the high upfront costs. This upfront cost is tempered by the lower interest rate over time, but some seniors choose other options to draw on their home equity, particularly if they don't plan to remain at the property more than five years.
There are no minimum income or credit requirements, but there are other requirements and senior homeowners should make sure that they qualify for the loan before they invest significant time or money into the process.
The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.
What's the difference between a reverse mortgage and a bank home equity loan?
With a traditional second mortgage, you income versus debt ratio must be sufficient for you to qualify for the loan, and you are required to make monthly mortgage repayments.
The reverse mortgage is available regardless of your current income and you don't have to make any monthly payments, because the loan is not due as long as the house is your principal residence.
With a reverse mortgage you cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment."
What you need to watch out for is that since interest is applied to your loan - the debt escalates.
What about your heirs?
When you sell your home, you or your estate will repay the cash you received from the reverse mortgage plus interest and other fees, to the lender. The remaining equity in your home, belongs to you or to your family.
If a property has increased in value after a reverse mortgage is taken out, it is possible to acquire a second (or third) reverse mortgage over the increased equity in the home. But in certain countries (including the United States), a reverse mortgage must be the only mortgage on the property.
The HECM is the most popular reverse mortgage because it generally offers the highest amount of money to homeowners of homes valued under $400,000. For homeowners of higher-valued homes, a Jumbo reverse mortgage will usually enable the homeowner to borrow significantly higher amounts of money.
The cost of getting a reverse mortgage from a private sector lender may exceed the costs of other types of mortgage or equity conversion loans. Exact costs depend on the particular reverse mortgage program the borrower acquires.
Keep in mind that many reverse mortgage contracts are confusing and hard to interpret, so you might want to seek out assistance of a qualified professional.
You will find many other valuable and practical tips, links and guides on this website, to help you learn more about reverse mortgages and choose the best loan for your needs. We hope this website will prove valuable to you - thanks for visiting our website. Good luck and good health to you.