How Reverse Mortgages Work Knowing how reverse mortgages work will help you have a more comfortable retirement. This type of mortgage is similar to how a home equity loan works. The value of the mortgage is based on the cash value of your home. The major difference is that the mortgage generally does not have to be paid in monthly instalments, subject to certain conditions. If you are a senior citizen or aged 62 and above, then you are qualified to take out a mortgage of this type.
Additionally, you have to own your own house that you are actually staying in. How you receive the cash amount is also different from other loan types. That is why it is aptly named reverse mortgage. Instead of receiving a lump sum in loan and having to pay it off through monthly instalments, you receive monthly payments taken out from the equity of the home. The mortgage is only paid upon the death of the applicant, by the surviving heirs, or when the house is sold or left unoccupied. The amount to be paid includes accrued interests from the moment the mortgage was taken but will never exceed the amount of the home equity. Thus, the mortgage may be easily paid by selling the house for value.
This type of mortgage was conceived as an aid to the elderly. Since they are already retired, their source of income from pension may not be enough to cover emergency expenses like medical costs or even home repairs. Their only asset is their home and to avoid having to move out and selling the house for cash, this mortgage perfectly caters to their situation.
How Reverse Mortgages Work Video
Reverse Mortgages How They Work
We have given you a lot of facts and even a video of information on how they work. If you still have questions then please give us a call, we would be happy to answer any questions you have. The reality is a reverse mortgages starts to works by you calling us to get specific details about your situation. Each loan is different and each persons situation is different. We hope you will give us the opportunity to serve your reverse mortgage needs.
How can your home help
you live in comfort?
Find information about Reverse Mortgages by State
- Industry News
- Interest Rates and Fees
- Can I qualify for a Reverse Mortgage
- How Reverse Mortgages Work
- Can I use this to Retire?
- HUD Program
- What is a Reverse Mortgage Loan
- Choosing the right reverse mortgages for seniors
- The One Reverse Mortgage
- Retirement and Reverse Mortgages
- R.M. Calculator
- Reverse Mortgage Loans
The Reverse Mortgage Helpdesk is a resource, clear and simple. It is also a free service. We want to make sure seniors and/or their loved ones who are making decisions about maintaining their home, have all the facts. Guidelines and procedures change constantly in the mortgage business. We want to make sure people who have worked all their lives are not taken advantage of by