Reverse mortgage offer different types of home loans for the seniors allowing them tapping the equity of their homes as viable source of income. It is obvious that availing reverse mortgage will require a lender who offers such mortgages. However, the question that is pertinent is how can a reverse mortgage lender help? Relevance of Reverse Mortgage for Senior People Major relevance of reverse mortgage for senior citizens is as follows.
During the recent economic crunches the senior citizens found themselves involved in major financial crisis.
Such crisis were more for those who are pensioners and restricted income sources.
Reverse mortgage has become one of the popular ways of accessing the equity they have built into their homes for the senior citizens. Reverse Mortgage Features Before going into the topic of how reverse mortgage lender can help it would be necessary learning about the basic features of such mortgage finance. Reverse mortgage allows the retired persons to tap the equity of their homes to access the funds required by them to meet different expenses after their retirement. To qualify for reverse mortgage loans including home equity loans the borrower must be 62 years or above in age. Accumulated home equity should not be lower than 40% of the mortgage required. Interest accumulates on monthly basis and needs to be repaid once the loan is due. Borrower has to repay the principal with interests to the lender. Unique Mortgage Loan Reverse mortgage is unique in much respect among the mortgage home loans. Debt increases with the mortgage and equity of the home diminishes simultaneously. With distribution of more money over the loan time span, the loan amount will proportionately increase. Distribution Options in the Loan On determination of the value of the home, lender pays the loan to the homeowner. In traditional mortgage the reverse happens. There the homeowner pays the lender. Three ways of disbursement of payments by the lender are monthly payments, lump sum payment, or extension of the line of credit by the lender so that the homeowner draws according to convenience. A borrower can have with the consent of the lender one or all the above methods in combination. For instance; a borrower can receive a lump sum on mortgage initially and monthly payments thereafter.
