How The Reverse Mortgages Bring New Income After Retirement

The reason, why the U.S.Government allowed the reverse mortgages was

, that they wanted the American seniors to get extra monthly cash. This happens simply by turning a part of their home equities into cash money by taking the special loans called the reverse mortgages.

But why seniors would need some extra money? The reasons are many, but maybe the most common are the increased medical treatment and the medicine bills. These can be very sudden and unexpected items, which take big sums.

1. First The Seniors Shall Pay Away The Usual Mortgage.

This is one of the hidden benefits of the reverse mortgages. By paying away the usual mortgage and taking the reverse mortgage loan, the seniors will get double benefits. They can stop paying the monthly back payments of the usual mortgage and will turn also this part into the cash money.

The reverse loan has never monthly payments or any other payments during the running time. Everything will be paid back, when the loan will be closed. This will happen, when the last borrower will move away, sell the home or die.

2. The Borrower Will Enjoy About The Price Increases.

The borrower or the borrowers will stay as owners and they will never lose the ownership to the lender. This means, that they will enjoy about the price increases of the homes. This brings them another opportunity. They can add the loan amount of the reverse loan, because the price increases will increase the appraised value of their homes.

3. It Is Fair To Turn A Part Of The Home Equity Into Cash Money.

Simply, because the equity is the sum, which they have paid during many years from their salaries. It is totally the money of the seniors and when they have a changed situation, of course it is natural to use the equity into that purpose, especially if this is the only chance.

4. Why Will Qualify And Which Home Types Are Accepted?

The Government made it easy for seniors. Everybody, who is at least 62 year old American and owns a home, where he has an equity left and which is his permanent home, will qualify. Properties with 1 to 4 units, when at least one unit is for the borrower, the single family homes, the HUD approved condominiums and the FHA approved manufactured homes. All home types must meet the FHA property standards and flood requirements.

5. The Federal Counselor Gives The Personal Information And Guidance.

The meeting with the counselor is compulsory. But it is also very useful. The counselor is not in the payroll of any lender, so he is free to give independent guidance also in the cases, when the reverse mortgages are not wise to take. A senior will get the best use of the visit, when he will think his needs and wants in advance.

by: Juhani Tontti

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