MORTAGES FOR SENIORS

All around the world seniors have been turning to Reverse Mortgages to help fund their retirement. What the Reverse Mortgages for seniors program does is use the equity the borrower has in its home and turns that equity into an automatic cash flow. Depending on the type of Reverse Mortgage loan the borrower chooses they will be able to use the money on basically anything.

CHOOSING THE RIGHT REVERSE MORTGAGES FOR SENIORS:

There are three different types of Reverse Mortgages for seniors to choose from.

Proprietary Reverse Mortgage Loans – Jumbo Loans

Federally Insured Loans

Single Purpose Reverse Mortgage Loans

The first one is called the Proprietary Reverse Mortgage Loan. This loan is for borrowers that have homes with larger amounts of equity in them. Borrowers can get this type of Reverse Mortgage loan through privates companies in their county. The great thing about this loan is that the borrower can access more of the equity in its home. In many cases the lender is able to lend up to 100% of the homes equity as opposed to the second Reverse Mortgage called Federally Insured Loan, which uses up to but not limited, 60-70% of the homes equity.

The second loan is called the Federally Insured Loan. This loan as talked about in the previous paragraph can help borrowers access up to 60-70% of their homes equity. Of course this amount is based upon how much the home costs and how much of that home is paid off. This loan is back by the government through HUD’s HECM program. This loan has fewer fees then most and is basically the most popular but not necessarily the better of the loans.

The last but definitely not least, loan is the Single Purpose Reverse Mortgage Loan. This loan is for borrowers who only want to tap into enough of their equity to pay for one single thing that they need. The single purpose that they choose to use this loan on will be decided between the lender and the borrower before signing. This loan will be followed by the lender to make sure the borrower is using the money for only that single purpose.

PAYING THE LOAN BACK:

No matter which loan the borrower chooses they have a few ways of paying the loan back. This loan is basically a backwards Home Mortgage loan, which means the lender is buying the home from the borrower. With this being said the borrower can then use the home as repayment. When the loan has been exhausted the borrower can give the home to the lender. One of the great things about this payment is that the borrower is allowed to stay in the home until death. There is no time limit at all.

Another way would be to sell the home to another party and use the money from the selling of the home and pay the lender back. However with every loan the borrower needs to be aware of the fees that are assessed over the time of the loan. So before the home is sold the borrower should talk with the lender and see how much is owed total, including all fees. After all information is received the borrower can then put the home up for the total amount if not more to assure a complete payment of the loan will be paid back.

The last way of paying the loan back is somehow finding the money. We all know that the odds of winning the lottery are low but hey it could happen. If you are able to find the money and pay the loan off without having to sell the home that you are also able to do it.

Related Resources:

Reverse Mortgages for Seniors