How Do You Start to Get a Reverse Mortgage?
Reverse mortgage allows senior citizens to take out a home equity loan against their home and can withdraw it as a lump sum, a line of credit or a monthly income for the rest of your life. You don’t have to repay one cent of this loan for the rest of your life so long as you continue to live in your house. The reverse mortgage is one of the largest incentives anyone probably ever had to toil to pay off the mortgage on his home before getting into senior years.
So what happens to this money? How is it repaid? Either when you sell your house, cease to live in it or it passes over to your estate, the loan agency calculates the amount disbursed, the interest and the loan closing costs and will recover it from your estate. The other property that you own cannot be touched and your heirs will incur no liability at all.
So what is the difference between this and a mortgage or a bank loan? For one, senior citizens will probably not qualify for a bank loan, especially if their income is low. A mortgage ties you to regular payments and you always face the threat of foreclosure if you miss your payments. With a reverse mortgage, you use the value that your house represents and do not have to make a single payment!
How do you qualify for a reverse mortgage? The requirement is simple and is as follows:
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You must be 62 or older
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You must have a clear title to your home, if there is any mortgage outstanding, it should be paid off from the reverse mortgage
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The property must be your principle residence and must meet certain minimum standards
So should you take out a reverse mortgage at all? While the decision is yours and yours alone, government regulations require that you undergo education on the subject and are properly counseled before you commit yourself.
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