The main benefit of these senior loans is, that a senior citizen can improve his monthly income status by taking cash money from the value, or equity, of his own home. If he has an usual mortgage left, he can pay it away with the new loan and to avoid all monthly payments from his home mortgages, including the reverse loan.
1. The Qualifications.
You can qualify, if you are an American senior, who is of age 62 or over and own a home, where you live permanently and which has equity left. The good news is, that the monthly income, credit record or the amount of other assets have no importance. The loan will be taken against the value of your home.
2. You Will Not Have Any Monthly Back Payments.
When the idea is, that a senior gets more disposable money every month or even as a lump sum, all expenses will be paid back, when the loan will be closed, i.e. when you move away from the home and it will be sold. These costs include start up costs, interests, loan capital, closing costs and some management costs.
3. How Much You Can Get Cash From The Reverse Mortgage Loans And When?
The loan sum depends on your age, the value of your home and on the interest rate. The older you are, the more expensive is your home and the lower the interest rate, the more you will get. You can decide by yourself, when the lender will pay you. The alternatives are as a monthly payment, as a credit line, as a lump sum or as a combination of all of these.
4. The Reverse Mortgage Loans Include Two Good Things, A Compulsory Insurance And Counseling.
Why the mortgage insurance is needed? The reason is, that if the selling price of your home does not cover the costs of the reverse mortgage loan, the insurance will pay the difference. Your other assets will never be used, nor you will never owe more than the value of your home.
The idea of the counseling is to give you a customized information, how do the reverse mortgage loans fit to your special needs, or is some other method better for you. These counselors are not in the payrolls of the lenders, but they are federal counselors, whos work is to give independent information for seniors and to protect them from over selling.
When you apply the reverse mortgage, take offers from many companies and also from state and federally funded places. What ever is your choice, it is important to let the experienced counselor to check it before you sign anything. In this way you will avoid expensive offers. The reverse mortgage is a long term commitment, so you will save a lot, when you do the work correctly.