Reverse Mortgage: What You Need To Know

Reverse Mortgage: What You Need To Know

Reverse Mortgage: What You Need To Know

A reverse mortgage is a way for senior citizens to be able to use the equity on their homes as income paid to them on a regular basis so they can live on that until they pass away. Once they have either moved out or passed away, the lender sells the house in order to pay themselves back whatever amount was used. Once the lender also gathers the extra amount of money from the low interest rate charged, any extra amount of money left over from the sale after that goes to the estate. Additional assets are not affected by reverse mortgages and will remain with the estate. If the house sells for less than the amount of money used, then the lender has to take that loss.

To be eligible for a reverse mortgage, you must be at the age of 62 or older. There are generally not any credit checks or checking on sources of income since the house is the asset the lenders will use to pay themselves back, but the house must either be paid for completely, or paid off with part of the equity money at closing (which would mean less money to live on). You also need to have the right kind of house as well to be eligible. Most homes are eligible, but mobile homes that have been bought more than 30 years ago without the land being owned, and without a permanent foundation would not be eligible. Although, sometimes condos and townhomes can be eligible.

No one can simply outlive a reverse mortgage because the selling of the home cannot start until the last homeowner passes away, or moves. A reverse mortgage is therefore a worry free way to have an income to live on, or an income to help support you. It is nice to know that your valuable assets cannot go toward helping the lenders pay off the loan, and that if the lender ends up selling the home much sooner than expected, the extra money will go to the estate.

See about getting a reverse mortgage today!

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