For any senior citizens who are encountering financial crisis, reverse mortgage would be a great solution. Confused? Then let’s get to know why.
A reverse mortgage is a special kind of loan involving the equity of your house. It lets you convert a portion of your house’s equity into money without having to sell it or pay additional monthly bills. its loan advances are tax-free and will not, generally, affect your benefits. Unlike the traditional second mortgage, the government reverse mortgages will pay you and is available regardless of your current income. In essence, this type of loan is paid with the homeowner’s equity.
Of course, there are qualifications set up for those who want to avail this type of loan. Firstly, the borrower has to be a 62 years old or older homeowner. Secondly, the house of the borrower should be able to meet the required feature as indicated. Which mean that it has to be a single house, a condominium or town home. Mobile homes that fall within certain guidelines are also eligible.
With a reverse mortgage, the borrower doesn’t have to make monthly payment to the lender since the loan does not have to be repaid until the home is sold, the borrower dies, or the borrower no longer lives in the mortgaged home as principal residence like if he or she is put in an elder care facility. In this type of loan, the homeowner can get the funds in multiple ways such as in multiple payments or in lump sum.
It is important to remember though that with this type of loan, you retain the title of your home so you still have to pay the property taxes, insurance, utilities and other expenses. If not, your loan may become due and payable.
Of course, every borrower desires to have the best deal they can. In any loan including the reverse mortgage, borrowers should be careful and wary of the sales pitches. So if you’re thinking of getting a reverse mortgage now, start shopping around and talk your way to getting the best deal possible!