What You Need to Know About Reverse Mortgages
By Alan Ferguson
If you own your home and have a good deal of equity in it then you might be interested in a reverse mortgage. This is especially so if you have a low income or need money to help you fund your retirement, a trip of a lifetime, or perhaps even to help you pay off taxes. Regardless of the reason you need money you can really cash in with a reverse mortgage. There are a couple of things you must understand about reverse mortgages first so keep reading and you will find out!
Unfortunately, reverse mortgages are not available to just anyone. They are only available to individuals who are at least 62 years of age. You may meet the other requirements for a reverse mortgage but no the age requirement and will still be denied. That is just the way it is. Unless you are at least 62 years of age you have no reason whatsoever to apply for a reverse mortgage until you reach that age.
A great thing about reverse mortgages is there is no income requirement. This is not what the loan is based on so what you make or don't make has absolutely no bearing on whether you receive a reverse mortgage loan or not.
Your health won't be evaluated either when you are applying for a reverse mortgage. The reason why is that your home is the payback on the loan if you are unable to pay it back yourself so your actual state of health is of little or no importance to whether or not you receive the loan.
Homeowner With Equity
The biggest deciding factor in whether or not you receive a reverse mortgage loan or not is if you are a homeowner and have equity in your home. The more equity you have in your home the higher loan amount you will be able to receive. The less equity you have the lower loan amount you will receive.
Paying the loan back is not required until the point you sell your home, are no longer permanently living in your home, or you die. This is an advantage for many older individuals who need money to live now and can use the equity in their home to do so.
Keep the Title
A reverse mortgage does not mean you are selling your home or giving up title to your home. It simply means that you are receiving a loan on the equity in your home that you will either pay back or leave your home as payment upon your death. If your home sells for more money than the loan amount then the loan is paid off and the rest of the money goes to your estate.
Applying is Easy
Believe it or not but a reverse mortgage is one of the easiest loans to apply and qualify for. You simply fill out the forms, provide the necessary information, and then receive the loan money!
Spend the Money How You Like
Another benefit to the reverse mortgage is that you can spend the money however you like. You can pay off your current mortgage, buy a new car, take a vacation, fund your retirement, or do whatever you like. There are no restrictions on how you should spend the money and this is appealing to a lot of older individuals.
Once upon a time reverse mortgages were a ploy to rob the older population of their homes by charging high interest rates and unfavorable conditions for the loan. Today, however, that is not the case and reverse home mortgages are quite safe. You of course should do the research to make sure all of your questions are answered but you will surely find reverse mortgages a great way to take advantage of the equity in your home without incurring immediate payments.
About the Author
Alan Ferguson of First Source Mortgage, specializes in California Reverse Mortgage. The company was founded in 1995 and was incorporated in 1998 in the State of California.
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