Reverse Mortgage

Discover the Power of
the Reverse Mortgage

A reverse mortgage is a mortgage that primarily is geared to elderly homeowners. This type of mortgage will allow them to use some or all of the equity that they have built up into their home over the years. Those that need funds to pay for medical bills, for long term care or to make improvements on their home can usually use the equity in their home to make these improvements. Reverse mortgage loans are somewhat different than a conventional mortgage though.

To qualify for a reverse mortgage, you need to be at least 62 years of age. There are no credit or employment verifications. Some homes, such as mobile homes, do not necessarily qualify for this type of loan because they may not be worth as much. The mortgage is taken out on the equity of the home. Equity is a term that describes the value of the home minus any mortgages or liens that are being held against it. The equity of a home goes up as the mortgage of the home is paid down. When the mortgage is completely paid off, the equity of the home is the same as the home’s value on the market. With a reverse mortgage you, generally, will not need to repay the loan. In 95% of the cases, reverse mortgage loans will not be repaid. The mortgage becomes due when the homeowner dies or moves out of his home. At that point, up to a year may be taken to repay the reverse mortgage or the home will be sold to pay off the mortgage loan. In most cases, the heirs of the property will make the decision to repay or sell.

In the last several years, the numbers of reverse mortgage applications has grown significantly. This is due to the lack of funds that are needed to fund living expenses. Social security and pensions just do not seem to be enough for most people. Therefore, the reverse mortgage can help them to make ends meet or do the things that they would like to do without the worry of the cost.

It is important to consider this type of mortgage carefully, though. Like any other mortgage, you are taking out an amount of money on your home’s value. It is often a costly thing to do simply because of the fees involved. But, for many, there is no reason not to consider a reverse mortgage.