When the U.S. Government decided to allow the reverse mortgage loans, they found out that there were a lot of senior Americans, who were equity-rich, but cash-poor.
The idea of the reverse mortgage loans is great: to turn a part of the senior home equity into cash money according the schedule, which a senior has decided!
Since 80`s, when the first reverse mortgage loans were launched, their popularity have grown steadily. Now it seems, that the big banks invest seriously to back the marketing of these senior products.
Reverse Mortgage Loan
The Government made the reverse mortgage loan a flexible one, so that as many American seniors as possible can get it. If you are at least 62, own your home and live there permanently, you will automatically qualify.
Altogether 3 seniors can be the borrowers, but all of them must fulfil the qualification requirements and they must be owners. The reverse mortgage loan will be paid back, when the last owner has moved away, sold the property or died.
How Does A Reverse Mortgage Work
The purpose of the reverse mortgage loan is to arrange more disposable cash to a senior. If he or she has a traditional mortgage left, he can pay it away with the reverse loan. This, plus the fact, that no monthly payments will be made, means big extra cash every month.
The capital and all expenses ( excl. small monthly service fees ) will be paid back at the same time, when the loan will be closed.
Reverse Mortgage Info - How Much A Senior Can Get
The loan amount depends on the age of a borrower, on the appraised value of the home and on the interest rate level. The older a senior is, the more expensive the home is and the lower the interest rate, the more he can get. The maximum amount is $ 625.000.
Because the reverse mortgage loans are meant to help seniors, they can dictate how they want the payments to happen. The alternatives are: as a lump sum, as monthly payments, as a credit line or as a combination of all or some of these.
Reverse Mortgage Cost
There are many different items, like: the compulsory mortgage insurance, the origination fee, the title insurance, the title, county recording and attorney fees, the real estate appraisal and the monthly service fee. A federal counselor can calculate the exact figures for you, because they vary from state to state.
Reverse Mortgage Medicaid
The reverse mortgage payments may affect your eligibility for U.S. Government benefits, like Medicaid. However, by your own arrangements you can avoid this. This is a serious reason, why it is wise to get guidance from free counselor and to do the financial planning before you take a reverse mortgage loan.
The idea of this site is to share useful and independent information about the reverse mortgage loans. We are not lenders nor we do not try to sell you these loans, we just share information about them. Surf through the pages and pick the necessary information, before you go and meet the federal counselor!