Why A Reverse Mortgage Might Be Right For You

What Are The Payment Options For A Reverse Mortgage Loan?

There are a variety of options, including a lump sum, a line of credit, or a monthly cash flow payment such as tenure or term payment plan.  You can switch between payment options at any time for a small one-time fee, and you could receive additional cash at a later date if you limit the first year’s cash payout.

How Do I Pay Back A Reverse Mortgage Loan?

Monthly payments are optional with a reverse mortgage.  Housing expenses must continue to be paid, such as property taxes and insurance (and homeowner association fees, if applicable), and home must be maintained.  The remaining balance is required to be paid back when you permanently move out of the house with interest agreed upon in the beginning.  The loan will be paid back by the equity in the home, which may increase over time.  If it does not, the reverse mortgage is insured by the Federal Housing Administration (FHA), and they will be responsible for the portion of the pay-off that exceeds the value of the house when the loan is repaid.  You will not owe more than the value of your home, as long as you abide by the loan terms. Your heirs will have 6 months with two 90-day optional extensions to decide what they want to do. Your heirs are still entitled to the remaining equity balance, if any, after the loan has been paid off. If your heirs want to purchase the home, they can by paying 95% of the appraised value or paying off the loan balance, whichever is less. They can also choose to refinance the home into their name or walk away if the property is upside down. Reverse Mortgage Specialist

What Is The Difference Between A Reverse Mortgage Loan And A Home Equity Loan?

A Home Equity Loan is a loan that requires you to make monthly mortgage payments on the principal and interest. Sometimes they require a balloon payment, and you’re not guaranteed access to the line of credit (LOC) funds. A reverse mortgage loan is a non-recourse loan that you do not have to pay monthly mortgage payments on, except for taxes and insurance and maintain the home. As long as all loan terms are met, the loan cannot be canceled or frozen and guarantees access to any unused funds.

What If I Already Have A Mortgage On My Home?

There may still be a reverse mortgage option for you, after reviewing your unique situation; your reverse mortgage planner can let you know what your options are. Reverse Mortgage Purchase

If you have questions about whether or not a reverse mortgage loan is right for you, it never hurts to do a little research or ask a local Reverse Mortgage Planner.  It’s important to know all the facts and features of a loan before approaching a lender or a bank.  The critical thing to remember is a reverse mortgage isn’t just used as a loan of last resort anymore.

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