Pros and cons of getting reverse mortgage plans
Bergen County, NJ -- (SBWIRE) -- 12/31/2012 -- The YouTube video, http://www.youtube.com/watch?v=Stpm1a8ILLQ provides people with all the information about the pros and cons regarding reverse mortgage. The only reverse mortgage insured by the U.S government is called a Home Equity Conversion Mortgage or HECM and is available through FHA approved lender like Reverse Loan Advisor. They provides some valuable advice to those above the age of 62 regarding loans, so that the senior citizens have a way of living a financially independent life without having to worry about foreclosure or loan repayment.
Reverse mortgage is also known as a lifetime mortgage and it is a service that is available to senior citizens. It is considered to be exact opposite of the typical mortgage. In the normal mortgage situation, one would have to borrow a sum of money at the beginning, using their house as a security for the same. They could pay this loan back over a period of time with the help of equated monthly instalments. In case one defaults on this loan, the bank has the complete authority to confiscate the legal documents of the house from the owner of the house.
In reverse mortgage, it works the other way around. One would have to pledge a property that one owns to a financial institution and in turn the institution would provide a person with cash flow for a particular period of time. This is an EMI that one receives from the financial institution. There are limitations on the houses that can be pledged- only houses that do not have any outstanding loans on them are allowed to be pledged.
There are some specific formats and time tenure that one would have to follow for the same. The house owner will be allowed to live in the house that they have pledged till they die or till the tenure of the reverse mortgage runs out- whichever event occurs first. As the video itself mentions, reverse mortgage lenders can really help the elderly out, for it provides them with a way of being financially independent without having to face the negatives and the pressures of having a mortgage on their house (which would be a really important investment and a source of security for them).
In order to find out more on how reverse mortgage can help the elderly, one can take a look at the video, or even visit the website, http://www.reverseloanadvisor.com