The 5 Questions Of The Reverse Mortgages

It is extremely important, that a senior has the full information about the reverse

mortgages and that he has listed all the costs, service fees and other small items to be able to get the full picture and to be able to understand the cost structure of the reverse mortgages.

1. How Many Borrowers There Can Be?

This is a good question, because the spouses will apply for the reverse mortgages together quite often. The lender will accept altogether three borrowers, but naturally all must qualify and be owners of the home. The loan will be closed, when the last owner will move permanently away, sell the home or die. It is also important to note, that the borrowers have not to be relatives between each other.

2. Who Can Get These Loans?

When the U.S.Government allowed the reverse mortgages, the idea was, that as many as possible could qualify and get the money, if they wanted. The qualification terms were set to be simple. Every person, who is an American citizen, age 62 or over and owns a home, will qualify. Naturally the home must have equity left, because the reverse loan is always taken against the home equity, which is the only guarantee.

3. Are These Loans More Expensive?

Compared to the usual mortgages these loans are more expensive. A borrower will pick either a fixed or variable interest rate in the same way as with the usual mortgage. There are several fees, which the federal counselor can tell you in detail.

4. Do All Home Types Qualify?

It is easier to list the home types, which do not qualify. These are the vacation homes or the secondary homes, the manufactured or mobile homes and the rental properties of more than four units and homes on leased lands.

5. Can I Deduct The Paid Interests In The Taxation?

You can deduct the paid interests, when you have first paid them. As mentioned, all costs and the loan capital will be paid away, when the loan is closed. That happens, when the last owner will move away, die or sell the home. So if your reverse loan is paid away, you can deduct the interests in the taxation. However, it is wise to consult with the local tax office.

by: Juhani Tontti

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