Cliffside, NJ -- (SBWIRE) -- 02/11/2013 -- A reverse mortgage is another way that you can get some money from your own home. In the past, you had to sell your house or use it as collateral for a loan which had to be repaid in monthly instalments. Reverse mortgages, on the other hand, is a type of mortgage where the loan amount is not repaid as long as the homeowner is still living inside the house. The loan is only repaid when the borrowers dies or permanently moves out of the house, or if the house is sold. The Reverse Mortgage lenders pay out the loan in three ways: lump sum, monthly payouts, or line of credit. This in reality is a great pro and benefit for the elderly.
The borrower can receive funds in a lump sum, fixed to a line of credit to be drawn down as needed, or paid out in monthly payments (like an annuity). In each case reverse mortgage interest rates accrue only on the amount that has actually been collected by the borrower.
Reverse mortgages pros and cons include:
With a Reverse Mortgage you will never owe more than your home's value at the time the loan is repaid, even if the Reverse Mortgage lenders have paid you more money than the value of the home. This is a particularly interesting advantage if you secure a Reverse Mortgage and then home price declines.
The money from a Reverse Mortgage is typically tax free, since it’s a loan when the homeowner receives the funds, as either additional fixed income or a lump sum.
How you use the funds from a Reverse Mortgage is not restricted - go travelling, get a hearing aid, purchase long term care insurance, pay for your children’s college education - anything goes. You can receive the Reverse Mortgage loan money in the form of a lump sum, annuity, credit line or some combination of the above.
If you are currently or will be eligible to receive low-income assistance from the Federal or State government (like Medicaid), you will want to be careful that income from a Reverse Mortgage does not disqualify you from that assistance. Since a Reverse Home Mortgage loan is due if your home is no longer your primary residence and the upfront closing costs are typically higher than other loans, it is not a good tool for those than plan to move soon to another residence.
Aside from required up-front fees and negligible cons, a borrower might view taking a reverse mortgage as a good rainy-day strategy.
To get more information, interested folks may watch this YouTube video
About Reverse Loan Adviser:
Reverse Loan Adviser offers two reliable programs, standard and saver. The standard program includes Reverse Mortgage lenders who provide an extensive amount of loans while the saver program offers a small amount of loan with a lower closing cost.
Cliffside Park, NJ