Reverse mortgages -- many people are looking for answers as to what these mortgages are and how they can benefit from them. People do not always understand the in’s and out’s of mortgages in the first place. Since the reverse form is much different from other mortgages, it is even more important that you, the consumer, understand what these are and how they can affect you. Reverse mortgages are some of the fastest growing loans taken out. For those who take advantage of reverse mortgages, it is often essential that they understand the process and the availability of the reverse loan.
Let’s talk about how the reverse mortgage works differently from the standard loans we are accustomed to. In standard mortgages, the bank owns the home and you make payments on it until you have paid off your loan. Then, you own your home. Reverse mortgages are a little different. You already own your home, but need money for any number of reasons. The reverse loans allow you to cash in on your homes value without having to pay the loan back on a monthly basis. But your equity in your home decreases with a reverse mortgage.
These loans can be paid to you, not to the lender, in monthly payments, a line of credit, or in a lump sum. There are stipulations on these types of loans. Typically, you must be over the age of 62 to apply for a reverse loan. And, you must own all or most of your home. In other words, you do not hold much of or any of a mortgage on the home. There are also limits on the reverse amount which you can cash out. This reverse amount is adjusted annually and depends on the area that you live in. Reverse mortgages are fast becoming a great way to pay off medical bills, provide lasting health care, or to purchase a vacation home, go on a trip, or to simply enjoy life in any way chosen. There are few stipulations on what the money can be used for. This makes this mortgage a great benefit to many older people.
Reverse mortgages offer home owners an opportunity to cash in on their homes’ value. It is easy to see how advantageous these loans can be. But, there is still a lot to consider. For example, through many of these mortgages, once the owner dies or the agreement comes to an end, the reverse mortgages are due or the home is given to the reverse lender.
When considering these reverse methods of getting cash, it is important to look for the best rates and never to sign any mortgages without realizing all the clauses and details. There are many reverse loans being sold that are actually scams. Never purchase mortgages of any sort, especially reverse ones, from door to door salesmen. Be sure to read the fine print! It is wise to consider those who stand to inherit property as well when considering a mortgage such as this reverse type. It simply makes sense to get your homework done when it comes to reverse mortgages.
Special Mortgage Types
The 40 Year Mortgage
Buy to Let
Adjustable Rate (ARM)
No Cost Mortgages
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