What is a Reverse Mortgage?
A reverse mortgage is a loan designed to allow seniors to draw upon the equity in their homes either by a lump sum payment or by monthly installments thus providing income even after retirement. The reason this type of mortgage is called a “reverse mortgage” is because the money goes directly to the home owner instead of into paying for the home.
Eventually the money paid to the homeowner is repaid with interest, however it generally doesn’t become due until the homeowner leaves the home due to death, move, etc.
Why should I get a Reverse Mortgage?
Getting a reverse mortgage is a big step and needs to be carefully evaluated. Many people have found that by taking a reverse mortgage they avail themselves of the equity they have built in their home.
Something about it allows them to live without moving out of their home. Do they use the words “Draw down” when referring to equity.
Typically those who benefit most from a reverse mortgage are those who plan to stay in their homes over an extended period and have built a decent amount of equity in their homes. Also, the risk associated with a reverse mortgage is significantly lower than more traditional types of mortgages because you can never owe more than the value of your home.
Contact one of our professionals today to find out if you have enough home equity to make a reverse mortgage a good decision for you. If you have a good amount of equity in your home and you plan on staying there for an extended period of time then a reverse mortgage might be right for you.
How do I qualify for a Reverse Mortgage?
If you own your home and are over 62 years of age you are eligible for a reverse mortgage. The home you are thinking of taking the reverse mortgage out on must generally be your primary residence. There are some conditions to what type of home may qualify.
- Typically single-family units are accepted by all programs
- Manufactured homes and planned developments can qualify for some programs
- Mobile homes and co-ops are generally not eligible