Reverse Mortgage - interested?
Reverse mortgages have become popular over this past couple of years as a way of raising some much needed cashflow. Its a safe plan that a lot of older americans have taken advantage to raise cash for unexpected medical bills and to supplement their main income. As with all loans that are secured on your home its well worth knowing more about reverse loans before agreeing to one.
A reverse loan differs slightly from both remortgages and home equity loans in a number of ways. A reverse mortgage pays you, and is available regardless of income. No payments are made on the reverse mortgage until sell your home,die or no longer live there as your principal residence.
What should I consider before applying for a reverse mortgage?
The cost of getting a reverse mortage can be high as you may have to pay some costs in cash before receiving your loan, although some lenders may take these from the principal amount of the loan. Other costs that have to be paid are interest, insurance and whatever services costs will be added on a monthly basis, so the amount you owe will increase, but you can never owe more than the value of your home. With a reverse mortgage you still retain the title of your home but are also responsible for all taxes service charges and general costs of maintaining your home.Your relatives will not be able to inherit your home unless they pay off the loan after you have passed away.
How much money can I get from my home?
To qualify for most reverse mortgages, you must be at least 62 and live in your home. The amount you can borrow depends on a number of things, your age, the current interest rate, loans fees, the value of your home or the FHA's mortgage limits for your area whichever is less.
Getting a Good Deal
If you are considering a reverse mortgage, shop around to compare your options and the offered terms. Learn as much as you can about reverse mortgages before you talk to a counselor or lender. It will help you ask more informed questions, which could lead to a better deal.
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