What is Reverse Mortgage
What is Reverse Mortgage? How does a reverse mortgage work?
Is A Reverse Mortgage for You?
After going over the question of what is reverse mortgage, here is the next topic: Those that are considering the reverse mortgage have to make a very important decision. Most of the time, those that are considering them are doing so because they need the funds for some main purpose. For example, they may not be bringing in enough from social security, pensions or savings to maintain their living expenses.They may have a large purchase that is necessary such as a new vehicle. Or, they may need the funds for home improvements.Some individuals use the funds that they get from a reverse mortgage to fund a second home or a recreational vehicle. If the funds are needed, those that have ownership or at least equity in their home, have the ability to secure this virtually free type of mortgage.
To qualify for a reverse mortgage, you have to be at least 62 years old. The older that you are, the more money you can get in your home mortgage on a monthly basis. Or, you may want to have the reverse mortgage funded to you in a lump sum. In any case, the reverse mortgage can happen rather quickly and can help you to secure the finances that you need.
To qualify for a reverse mortgage, you need to have at least some equity in your home. It is the equity that you have that you will be cashing out and using for funding. Equity is the amount of money that the home is worth minus any mortgages or liens that may be on it. The higher the equity is, the more of the home that you own. When you pay off your mortgage totally, the equity and the value of the home is the same. Thosethat are looking to use a reverse mortgage need to have at least some equity to cash in. This is where the funds come from.
If you still owe money on your home, the equity that you cash out in a reverse mortgage may need to go to pay down the rest of what is owed on the mortgage. The rest will be yours to use as you please. Unlike other loans, you can use the funds for anything that you see fit, once the mortgage on the home is paid for.
The reverse mortgage can be an ideal choice for those people that are in need of funding but do not have the money any other way. Since the funds for a reverse mortgage are not due to be paid back, in most cases, until the borrower dies or moves out of the home, the homeowner actually has access to money in the value of their home. Additionally, should the value of the home go up from the time that the reverse mortgage is taken, a second or even third reverse mortgage may be taken out.
Now, where you know what is reverse mortgage, continue to read about Reverse Mortgage Requirements.