A reverse mortgage is a home equity loan designed for older homeowners who are 62 years or above. The borrower doesn’t need to make monthly mortgage payments for such a loan. The loan is repaid once the borrower moves out or dies. These loans are a great option for cash-strapped seniors. The first reverse mortgage was introduced in 1989 where seniors over 62 years were able to access a part of their home equity without having to vacate the house. This read offers information on reverse mortgages.
There are a lot of motivations that may lead to a reverse mortgage. In most cases, people use this option to pay off debt. The bank will make the payments to the borrower based on a percentage of his/her accumulated home equity. The loan has to be repaid only after the borrower permanently moves out, dies, or sells the home. The amount you can obtain from a reverse mortgage is determined by several factors such as your age, interest rate, and the value of the home. You should use the particular home as your primary residence to become eligible for a reverse loan. Usually, the more valuable your home is and the older you are, the more money you can get from this type of loan. For more information check out Franklinfirstfinancial.com
There are many advantages as well as disadvantages of availing yourself for a reverse loan. Some of the benefits of such an investment are: the borrower does not require to pay the loan on a monthly basis, the proceeds can be used to pay off debts, funds will improve your monthly cash flow, and the money can pay off the existing mortgage. The cons of the loan are: closing charges & fees could be high, the borrower should continue to pay property taxes & homeowner insurance, and the loan can complicate your wish of keeping the house within the family.
The read as mentioned earlier offers information on what is a reverse mortgage as well read the Main Page of Franklinfirstfinancial.