A reverse mortgage can be the best method if you are in need of money, but make sure to conduct your research first before the application. A reverse mortgage is a way to have more cash so that you can still enjoy your retirement years if your savings, retirement funds, and pensions are not enough to supply your needs after retiring.
Reverse mortgage is also known as conversion mortgage. You will have cash when you use your home as your collateral. Reverse mortgage is somehow similar with standard mortgage, however the borrower doesn’t need to prove that he has income before he can get the cash. You don’t also have to pay for the monthly payment.
When the property is sold the load and its interest are paid in reverse mortgage. You have to follow certain standards before you are qualified for the loan. You have to be 62 years old and more. You should have your own house or at least a small balance of your mortgage which can be paid off from the total amount which you may receive from the reverse mortgage. It is important that you live in the house. It doesn’t matter if it is a single unit or a 2 to 4 unit as long as you live there. Condominiums and manufactured houses are also allowed as long as they pass the requirements. Prior to the application of the loan, you need to have the form which is approved by the HECM counselor.
The advantages of Reverse mortgage
Homeowners can easily get cash from the equity of the house without adding the monthly expenses. The lenders don’t have the power to force the homeowner to sell the house just to have the loan paid. In reverse mortgage, the owner will have all the years to stay in the house as long as he lives even if the interest as well as the amortization of the house exceeds from its value.
The disadvantages of reverse mortgage mentioned from various reverse mortgage faq
A reverse mortgage is costly than the conventional mortgage. Most of the time, the fees of the reverse mortgage is high although it is converted into loan and you don’t have to pay it immediately. Since HUD is the administrator of the program, all fees are fixed. There are also financial adviser who keep on asking for payment in return of the advice that he will give. You can research online to know more about reverse mortgage info. See to it that your chosen company is approved by the HUD.
The company will own your house once you will apply for the reverse mortgage loan. That’s why you have to make sure that you will calculate all of the costs. Get more advice. Before deciding, talk to your financial adviser and the whole family. It is because your house is very important. No matter if the borrower is already old, he has to think clearly. Make sure that he has no dementia or Alzheimer’s. Read more reverse mortgage information and see all the benefits of it.
Senior Loan Options 