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Reverse Mortgages
What is a Reverse Mortgage?
In brief, a Reverse Mortgage is a financial
tool that allows you to either, take money from your existing home in lump
sums or in monthly payments sent directly to you. This is done without you
incurring a traditional monthly payment to a mortgage company. These
funds that you take from your existing home do not have to be paid back as
long as you live in your home. You can receive the funds from your home in
one of the following ways;
 | In one lump sum |
| In a monthly payment plan |
| In a credit line that you can access when you
need it |
| A combination of any of the above three options |
Make no mistake, it is not a ‘get something for
nothing loan’. As you access funds either by a lump sum payout or by
one of the other methods mentioned, the balance of your existing mortgage
grows and your equity decreases. These loans are not for everyone, however
they do have a place in the finance market for many home owners.
Please feel free to call me to discuss strategies concerning Reverse
Mortgages.
Who qualifies for a Reverse Mortgage?
In most cases Reverse Mortgages are available for
those who fit the following criteria;
| At least 62 years or older, including any
co-owner of the home |
| The borrower(s) must indeed own a home |
| The borrower(s) need to live in the home at least
6 months out of each year |
| The residence must be an owner occupied 1, 2, 3,
or 4 unit residential building, but not a manufactured home |
How much do I qualify for?
The factors are very much dependent on your current
age, current interest rate and the physical condition of your home.
This can be determine by a simple calculation that I will prepare for you.
When does the loan have to be paid back?
The following are common circumstances that require
that a reverse mortgage loan be paid back to the lender / bank;
| If you sell your home |
| The surviving borrower passes away |
| You have moved from your home for greater than 12
months |
| Your allow your home owner’s insurance policy to
lapse |
| You rent out your home |
| Another owner is added to the title of the home |
| Another loan is taken out against your home |
| The zoning is changed for your home |
How much will I owe on my Reverse Mortgage loan?
| This depends of course on how much you borrow
originally. Note: That even if the value of the home depreciates over
time, the amount owed will never be greater than the value of your home at
the time that the loan is to be repaid |
| The amount owed can never be greater than the
value of your home at the time the loan is repaid |
I hope that I have helped you with some general
information on Reverse Mortgages. As always, nothing is simple! ASK
QUESTIONS FIRST and look for other options to help make up your mind if
a Reverse Mortgage is the best choice for you. Finally, seek an experienced
professional.
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