|
What Is A Reverse Mortgage? Homeowners aged 62 and above need not rely on their retirement money alone. In case the retirement money they receive is not enough and they find that they need additional cash, they can get the money they need by getting a reverse mortgage on their home. A reverse mortgage, unlike other standard mortgages where the borrower pays the bank, the bank is the one that pays or remits money to the borrower. A reverse mortgage occurs when the homeowner converts part of his home’s equity into tax-free income. The home need not be sold, nor the title given up. No new mortgage agreements need to be set up either. The home remains in the property of the borrower until such time that he needs to vacate it. Qualifying For A Reverse Mortgage Generally, reverse mortgages are available for people ages 62 and above. If you fall under this age bracket, you can get a reverse mortgage and you do not have to have a regular source of income or a medical condition to qualify. However, two conditions need to be met: the first is that you have to own the property that will be under reverse mortgage; and that the equity of the home is enough to pay off the full amount of the desired loan. Properties that can be placed under reverse mortgage include family homes, homes built after June 1976, condominiums and townhouses. The money that you can get from a reverse mortgage may be given to you in several ways. You may opt to receive it all at once; as a monthly cash advance; as a credit line where you can simply withdraw the amount you need at any time, or a combination of these. Once you’ve gotten your money, you don’t have to worry about paying them back, at least until you decide to sell your home or move out permanently. Spending The Money You Receive From A Reverse Mortgage The funds that you can obtain from a reverse mortgage may be used for a variety of purposes. These could be used to augment your retirement income, or be used to repair or renovate your home. It can be used to pay for medical or health care bills, or you may even use it to fund that long-overdue vacation. The possibilities are endless. Reverse mortgages are only available to elderly home owners and the amount of money that can be obtained from reverse mortgages will depend on the borrower’s age, the appraised value of his home, the interest rates and pre-established lending limits.
|
