Here are some points to take into account when considering a Reverse Mortgage.
What is a reverse mortgage:
A reverse mortgage is a loan given to seniors on the equity in their home. It can be in one lump sum or several payments. In a conventional loan, amortized payments are made to the lender on a monthly basis with the equity increasing as payments continue. At the end of the payment term the property has been paid off and the lender releases the home to the owner. In a reverse mortgage, the lender is either making no payments on the home, in which case the interest is added to the property lien, or if the lender is paying the homeowner, the equity decreases on the property.
How old do I have to be?
You need to be 62.
When do I have to pay it back?
The loan gets paid back upon your death, or if you sell the home.
How do I qualify for a reverse mortgage?
The lender will look at your age, your mortgage obligation and the equity in your home.
Are all reverse mortgages the same?
No. You need to shop around as you would for a regular mortgage. Each lender’s programs are different. Make sure you are getting the best deal.
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