In a time of financial insecurity, reverse mortgages for seniors can provide some relief for an age group who are often living on a fixed income.
While they may not be the answer for all, they can be the ideal solution for many who are facing monetary difficulties.
So, what is a reverse mortgage? Well, it is a type of home equity loan that requires no repayments until either the property is sold, the homeowner no longer uses the property as their permanent residence, or the homeowner dies.
Since the decision by the bank or finance company is not based on the homeowners income, these reverse mortgages are fairly easy to obtain for the more elderly members of our society, particularly so because they have most of their money tied up in their property, which is what these types of mortgages are leveraged on.
There are some non negotiable stipulations though, including...
- The age of the homeowner must be over 62
- The house must be either paid in full or with just a small balance left on the mortgage
- Insurance and taxes must continued to be paid by the homeowner
- Attendance at a mandatory counseling session is required to ensure full understanding of the mortgage process
What happens with a reverse mortgage is pretty simple to understand. The homeowner is given a loan based on the equity in their home. The amounts of the loans will vary, depending on the value of the home and the equity therein.
The homeowner can opt to receive monthly payments, a line of credit or a single lump sum payment; whichever suits their needs best. The funds received by the homeowner can be used in any manner he/she desires; paying bills, making home improvements, taking a trip or any other purpose.
No repayments are made in reverse mortgages for seniors. That is to say, no repayment for as long as the homeowner makes the home their primary residence and is still alive. Full repayment of the mortgage is due when one of the following occurs:
- Death of the homeowner
- The property is sold by the homeowner
- The homeowner permanently leaves the property; i.e., taking up residence in a nursing home, with a family member or hospice facility
In many cases, a reverse mortgage is a benefit for its recipients. When looking at the benefits though, still bear in mind the fact that a large closing fee may be due on the signing of the mortgage papers. This fee is typically larger than that of a traditional mortgage and it can vary significantly from place to place..
Reverse mortgages for seniors are not a decision to be taken lightly and, as with all financial decisions, all paperwork should be closely examined before making a commitment. Don't let the paperwork put you off though as professional assistance and counseling is available. - 29904
While they may not be the answer for all, they can be the ideal solution for many who are facing monetary difficulties.
So, what is a reverse mortgage? Well, it is a type of home equity loan that requires no repayments until either the property is sold, the homeowner no longer uses the property as their permanent residence, or the homeowner dies.
Since the decision by the bank or finance company is not based on the homeowners income, these reverse mortgages are fairly easy to obtain for the more elderly members of our society, particularly so because they have most of their money tied up in their property, which is what these types of mortgages are leveraged on.
There are some non negotiable stipulations though, including...
- The age of the homeowner must be over 62
- The house must be either paid in full or with just a small balance left on the mortgage
- Insurance and taxes must continued to be paid by the homeowner
- Attendance at a mandatory counseling session is required to ensure full understanding of the mortgage process
What happens with a reverse mortgage is pretty simple to understand. The homeowner is given a loan based on the equity in their home. The amounts of the loans will vary, depending on the value of the home and the equity therein.
The homeowner can opt to receive monthly payments, a line of credit or a single lump sum payment; whichever suits their needs best. The funds received by the homeowner can be used in any manner he/she desires; paying bills, making home improvements, taking a trip or any other purpose.
No repayments are made in reverse mortgages for seniors. That is to say, no repayment for as long as the homeowner makes the home their primary residence and is still alive. Full repayment of the mortgage is due when one of the following occurs:
- Death of the homeowner
- The property is sold by the homeowner
- The homeowner permanently leaves the property; i.e., taking up residence in a nursing home, with a family member or hospice facility
In many cases, a reverse mortgage is a benefit for its recipients. When looking at the benefits though, still bear in mind the fact that a large closing fee may be due on the signing of the mortgage papers. This fee is typically larger than that of a traditional mortgage and it can vary significantly from place to place..
Reverse mortgages for seniors are not a decision to be taken lightly and, as with all financial decisions, all paperwork should be closely examined before making a commitment. Don't let the paperwork put you off though as professional assistance and counseling is available. - 29904
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