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 What Is A Reverse Mortgage? There has been
a lot of talk about a new type of home loan, but what
is a reverse mortgage? It is a loan for seniors only. Applicants must
be at least sixty-two years of age. If the loan isn’t to obtain a new home, what is a reverse mortgage for? It is for people who already own their home. The lender disburses the equity in the home in one lump sum, as a line of credit, or in monthly payments. If there are any existing mortgage loans on the home, they must be paid off. They do not have to be paid in full prior to obtaining the new loan, but they must be paid off with the proceeds from the loan, as a reverse mortgage must be the first and only mortgage loan on the property. When and how is this loan repaid? What is a reverse mortgage? The homeowner's obligation to repay the loan is deferred until the owner dies or the home is sold. The loan ends if the owner moves out of the home for a period of at least twelve consecutive months as well. In the event that the homeowner goes to a retirement home, a personal care home, or a nursing home, the loan would end, and the home would have to be sold. The proceeds from the sale would be used to pay off the loan. Any difference between the proceeds of the sale and the loan balance belongs to the homeowner or the homeowner’s heirs. If the proceeds are not enough to pay the loan balance, the bank does not require that the difference be paid. . What
is a Reverse Mortgage:
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Unlike
traditional mortgages guidelines, there are no income or credit requirements.
It is not necessary to have a certain annual salary or a specific credit score.
