Reverse Mortgage – Everything you need to know about this loan
If you are 62 years old and you require cash instantly, you may take out a reverse mortgage loan. This type of mortgage loan enables you to get the amount of cash you need so that you can stay in your own home. These types of mortgages enable the homeowners to illustrate on their home equity. The homeowners who are planning to take out a reverse mortgage loan should assess their options carefully and find out mortgage how much can I borrow so that they may be able to understand whether or not this kind of loan is the best solution for them.
What is a Reverse Mortgage?
A reverse mortgage is a type of home loan that you may take out provided you are 62 years old. Like the other traditional home loans, you do not require repaying the loan amount you get till you live in your home. As such, the homeowners can get money from their own home in case of a reverse mortgage. For this, the homeowners do not require moving out from their own home or making the mortgage payments every month. You may get the money in monthly payments, a lump sum or a credit line from your reverse mortgage.
Who is eligible to take out a reverse mortgage loan? . A person, who is 62 years old, has his own home and lives in it as a primary resident is eligible to take out a reverse mortgage loan. In case, you do not own your home, you can use the proceeds from a reverse mortgage to repay the other mortgages or the home debt. You do not need to show any income qualifications to get a reverse mortgage. As such, without any income and without the monthly payments, you can still qualify to take out a reverse mortgage.
When does a reverse mortgage become due?
If you are planning to sell of your valuable home or thinking to move out from your home forever, you must start repaying the money that you had received and the interest rate that has accumulated for your reverse mortgage. Besides, you may be required to repay the loan if you ignore repairing your precious home, purchase homeowners insurance or pay your property taxes. In case you have lived in your home till your death, your heir will be held responsible to repay the reverse mortgage loan that you had taken out.
How much money can you get in a reverse mortgage?
It entirely depends upon your age, your home’s value and the present rate of interest as to how much amount of money you can get through a reverse mortgage. You need to know that it is not possible for you to get more money than the value of your own home. The more aged you are and the more worthy your home is, the more money you will be able to receive through a reverse mortgage.
What are the disadvantages of a reverse mortgage?
Reverse mortgages are said to be costly that you may take out only when you require money in an emergency situation and when there is no other option available. You require paying the origination fees, appraisal fees and the other fees that add up to huge amount of money before taking out the loan. The monthly service fees that you need to pay may lessen the amount of money you receive even in situations when home equity falls down and the debt problems tends to increase.
The home equity loans or personal loans are less expensive options for the homeowners so that they can afford to make the monthly payments. Another possible option is to sell off your present home and shift to a home that you can purchase within your capacity.