subject: Reverse Home Mortgage – Is The Home Equity The Only Money You Have [print this page] Reverse Home Mortgage Is The Home Equity The Only Money You Have
The reverse home mortgage honestly uses the home equity as the only guarantee for the loan. It works in a reverse way compared to the usual mortgage. And it really works. The popularity tells the facts, more and more seniors use the reverse home mortgage as their source of money with which they can finance their necessary expenses.
1. Many Seniors Cannot Add The Monthly Expenses.
When the budget of the seniors are tight, there is no realistic way to increase the monthly expenses and there is no way to get more earnings. So the only way is to try to find some other sources. The Government invented, or copied from Europe, the reverse home mortgage, which is a loan without monthly payments.
2. Almost All Can Qualify.
The qualification is flexible. If a senior is at least 62 and owns a home, where he has an equity left, he will automatically qualify. The spouses and the groups of maximum 3 seniors are also accepted, but then all must fulfil the qualifications and become the owners.
3. How Much A Senior Can Borrow?
It depends on 3 things, which are the age of the borrower, the appraised value of the home and the interest rate level. The older the borrower is, the higher the home value is and the lower the interest rate level, the more he will get. The maximum is $ 625.000.
4. A Senior Can Pay Away The Monthly Expenses.
The terms of the reverse home mortgage says, that if a senior has a usual mortgage left, he must pay it away, because a borrower can have only one mortgage type. He can also use the money to pay away the credit card debt or some other monthly payment to be able to get more disposable cash.
5. The Credit Score Nor The Income Statement Have No Meaning.
The reverse loan is always taken against the equity of the home. This fact plus the compulsory mortgage insurance guarantee that the lender will get the money in all cases and that the borrower will never owe more than the value of the home. This also means, that the credit score or the income information of the borrower have no meaning.
Even a senior without income can get the loan, because there honestly is no monthly payments. The original idea was to release the equity of the home into the daily use of a senior. The present attitudes among seniors favour this loan type, because it is accepted for seniors to live full life. And the full life requires funds. When we cannot take anything with, it is natural, that the seniors use the money, which they have collected during the many years.
