Reverse Mortgages 101
youíve heard of a reverse mortgage. Maybe youíve even done some
research on them. Or maybe youíre scratching your head wondering what
on Earth Iím talking about.
reverse mortgage is a loan that is available only to senior citizens
age 62 or older who own their homes. It is similar to a home equity
loan in that it allows the homeowner to borrow against the equity in
his home. The difference is in the way it is repaid. A home equity loan
requires the borrower to make monthly payments or risk losing his home.
A reverse mortgage, on the other hand, requires no repayment until the
borrower moves out permanently, sells the home, or dies.
house is usually sold to repay the reverse mortgage. If you get a
reverse mortgage and then sell your home, the mortgage must be paid
off. You keep the rest of the money from the sale. If you pass away
while still living in the home, the house is sold and any funds
remaining after paying off the reverse mortgage are distributed to your
are several ways that you can receive the proceeds of a reverse
mortgage. They can be distributed in a lump sum, in monthly payments,
or as a line of credit. You can even combine two of the methods of
distribution to suit your needs. This flexibility is a key advantage of
is no income requirement to receive a reverse mortgage. Since you wonít
be making any monthly payments, you could have absolutely no income and
still qualify for a reverse mortgage. The only requirements are:
borrower and any co-borrowers must be 62 years of age or older. If
anyone whose name is on the title to the home is under 62, that
personís name must be removed.
must have sufficient equity in your home. If you have an existing
mortgage, in most cases it must be paid off. This can be done with the
proceeds of the reverse mortgage, but it will reduce the amount of
funds available to you.
housing must qualify. It must be owner-occupied, and have four or fewer
units. Some manufactured housing and most cooperative housing does not
qualify, but most other houses and condominiums do.
is no limit to the ways you can use the funds from your reverse
mortgage. They can be used to make repairs to your home, pay health
care costs, or help cover monthly expenses. You could use them to buy a
car or even go on vacation. The flexible payment options facilitate the
use of the funds in any way you wish.
Reverse mortgages are worth considering if you are a senior citizen who
needs money for any reason. They allow you to use the equity in your
home to get the cash you need, all without adding the burden of another
If you would
like more information about the reverse mortgage process and how it can
help you live out your retirement without the stress of financial
burdens please call me or one of my team members at 877-787-1003 or
send an email here: email@example.com
will be happy to provide a complete complimentary analysis of the
amount of money you could expect to receive from the best available
James Barath, CMA, CMPS