Most, Homes Are Eligible, But Not All For A Reverse Mortgage

Category: Finance, Mortgages.

You may have heard a lot recently about the concept of a Reverse Mortgage.

A reverse mortgage is designed for older homeowners age 62 and up. So what exactly is it? It enables them to convert part of the equity in their home into tax- free income without having to sell the home, or take on, give up title a new monthly mortgage payment. Sounds like a pretty good option if you re a senior citizen, don t have a lot of income, but do have a lot of equity in your home. It is called a reverse mortgage because instead of a homeowner making payments to a lender, the lender is making payments to the homeowner. Additionally, the income from a reverse mortgage doesn t have any limits.

You can receive your money in a variety of ways. It can be used on anything from healthcare and food to taking a dream vacation or buying a new car. Lump sum. A line of credit. Fixed monthly payments either for a set term or for as long as you live in the home. A combination of the above. The amount of money a person is eligible to receive depends on their age.

However, there are some stipulations. If the reverse mortgage is going to a couple then the age of the youngest person in the couple is used. In general, the older you are and the more equity you have in your home, the more money you can get. The amount you are able to receive also depends on your home s appraised value, and in some, interest rates circumstances it depends on the lending limit in your area. Most, homes are eligible, but not all for a reverse mortgage. Manufactured homes built before 1976 and most cooperative housing are ineligible. If your family is a single- family home, a multi- unit property, a manufactured home built after June 1976, or a townhouse, a condominium- you re eligible.

Lastly, you may still qualify for a reverse mortgage even if you have an existing mortgage. Often people use the reverse mortgage to pay off any existing mortgage debt. The general guidelines say that your reverse mortgage must be in a first lien position, which means any existing debt must be paid off. As the population ages, reverse mortgages will likely gain in popularity. Your home and your personal finances are not decisions to be made lightly. Like any mortgage, it is important to weigh the decision carefully and take time to investigate the company you re dealing with.

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