5 Reasons Why The Reverse Mortgage Loan Is Better
The Government allowed the seniors to turn a part of their home equities into disposable
cash money as a lump sum, credit line, monthly payments or as the combination of these. The reverse mortgage market had born. The qualification idea was, that all at least 62 year old, who owned a home, where they had equity left, could get the loan.1. The Monthly Payments Will Decrease.
So the source of the reverse mortgage money comes from the equity of the home. The law says, that if a senior has a traditional mortgage left, he has to pay that away with the reverse mortgage loan. This releases naturally more money into the monthly use.
The reverse mortgage loan has one great benefit. There is no monthly back payments, like the usual mortgage has. All incurred interests and other costs will be paid back, when the loan will be closed. That happens, when the last borrower will move away, die or sell the home. Then the home will be sold and the selling price will be used to pay the loan capital and the incurred expenses.
2. The Extra Cash Comes From The Thin Air.
So it feels, but as said in the previous chapter, the money comes from the equity of the home. Actually a senior will take a loan from the bank, who will use the home equity as a guarantee. The loan has an interest, a fixed or variable one, plus some other costs, which all will be paid at once, when the home is sold. If the selling price does not cover the whole sum, the compulsory mortgage insurance will take care about the difference.
3. The Owners Will Never Lose Other Assets Nor More Than The Value Of The Home.
This is important. If the reverse loan will be closed during the living time of a senior, he will not have a danger, that the lender could take the ownership to cover the reverse mortgage loan, nor cannot use his other assets to pay the reverse loan nor make the heirs to pay a part of it, after a senior has died.
4.It Is The Only Source Of Money.
Despite of the fact, that many seniors have their home equities, they cannot afford more expenditures on a monthly basis. On the contrary they would like to pay less every month. The reverse loan is ideal for them, because the usual mortgage can be paid away and to get additional income on the top of that.
5. You Can Take Two Other Seniors With.
The reverse mortgage law allows a senior to take his spouse or other two owners with as the borrowers. Of course they have to be at least 62 year old American, home owners and to live permanently in the property.
by: Juhani Tontti