Tips On Reverse Mortgages
Reverse mortgages can be a great option for the right type of homeowner. It is essential to understand the pros and cons prior to selecting this mortgage program. This blog offers tips on reverse mortgages.
What Is a Reverse Mortgage
A reverse mortgage is a special kind of home loan that lets you convert a portion of the equity in your home into cash. However, unlike traditional equity loans, borrowers do not have to make monthly payments towards the loan. The mortgage is paid back when the borrowers no longer use the home as a primary residence or no longer comply with the terms of the loan. The amount owed includes the cash taken out, interest on the loan, and other associated fees.
Who Qualifies for Reverse Mortgages
Not every home owner can apply for a reverse mortgage. You must...
- Be at least 62 years old.
- Own a property that you live in as a primary residence.
- Have a qualifying property type.
- Have equity in the home.
- Have consulted with a reverse mortgage counselor.
Loan Amount Calculation
The amount of a reverse mortgage is based on how old you are, the prevailing interest rates, the appraised value of the home, and FHA mortgage insurance limits. Older homeowners may use more equity. The funds can be received all at once, on a monthly basis, or through a line of credit.
More Tips On Reverse Mortgages
Reverse mortgage options are offered by most mortgage companies. The closing costs are typically more than other loan types, so it should only be used when no other loan options are feasible. Program terms and charges can vary, so it would be wise to review quotes from a few different companies. The tips on reverse mortgages shown in this article is intended strictly as an overview. Requirements may change, so speak with reverse mortgage professionals for information based on your situation.