So What is a Reverse Mortgage?
When a client says tell me about reverse mortgage, their counselor will give them all of the facts that they need to know. All consumers are required to meet with these counselors before they can even apply for one of these mortgages.
The counselors are not affiliated with banks, and they have been trained to explain this product in simple terms. Essentially, a reverse mortgage is a financial product that buys a home from a homeowner while still letting them live in it.
It is reserved for people who have reached a certain age. In fact, the youngest homeowner must be at least 62. The amount of the loan is determined by how much the home is worth or by how much equity is in the home. The amount is split into monthly payments. The older the homeowner is, the higher their monthly payments can be.
The homeowner can opt to take a set amount of money every month, or they can take the funds on a line of credit. In some cases, they can even take a combination of this. They can take a smaller amount of money each month, and they can also have a line of credit to use as they need it.
While they live in the home, they must continue to pay their taxes. In addition, they must continue to perform regular maintenance on the home. When they finally die or move out, the house will be sold. If there is any money left over, it can go to their children or heirs.
Reverse Mortgage Information
A reverse mortgage is a way to access the equity in your house. Instead of being a conventional loan where you will have to repay the loan a reverse mortgage allows you to not increase your monthly expenses by loaning against your existing equity.