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November 19th, 2007 9:38 AM
What is a reverse mortgage?


A reverse mortgage is a way for homeowners with substantial equity in their home to withdraw the equity tax free. The loan is different from a home equity line of credit because it does not have to be repayed as long as the homeowners occupy the property. The proceeds can be used for any purpose, for example property taxes, medical bills, start up businesses, vacations, etc.


How can I receive my money?


There are several options available for receiving your equity:


1. Lump sum


2. Monthly payments for as long as you live in your home


3. Monthly payments for a fixed number of years


4. A line of credit you can draw upon as you need


5. Or a combination of these options that best fits your needs


How do I qualify?


To qualify, you and any co-borrower must be at least 62 years of age and own a home. This home must be your primary residence. The best part of the program is there are no income requirements and only minimal credit requirements to satisfy.


How much money can I qualify for?


How much money you can receive is based upon the age and number of the borrowers, the value of the house, current interest rates, the maximum loan amount and the program you select.


Are there any costs associated with a reverse mortgage?


Yes, but none of the costs will be paid for out of the homeowner's pocket. Closing costs and fees will be incurred when you obtain a reverse mortgage. Closing costs include the appraisal, title insurance, origination fee and recording fees. With most lenders these fees can be rolled into your loan so you do not have to pay for them up front.


When will my reverse mortgage become due and payable?


Your reverse mortgage must be repaid when you either sell your home or permanently leave the residence. In the event of death, your heirs will have the choice of keeping the house and repaying the loan with liquid assets or a conventional mortgage, or selling the house and using the proceeds to repay the loan.
Posted by on November 19th, 2007 9:38 AMPost a Comment (0)
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