Information You Should Know Before Applying for a Reverse Mortgage

Reverse mortgages are beginning to skyrocket as seniors are realizing the need for extra cash for various expenses. The money gained from reverse mortgages is often used for medical expenses, necessary home repairs, or even as a supplement to social security. Reverse mortgages can give seniors the opportunity to extract much needed money out of their home equity.

Are you eligible for a reverse mortgage?

  • Are you over 62 years of age?
  • Do you own your home?
  • If you do not own your home, is your mortgage almost paid off?
  • Are you planning on living in the home?

If you answered “yes” to these questions you may be eligible for a reverse mortgage. The FHA (Federal Housing Administration) requires you to meet with an approved counselor before applying. There you can discuss your eligibility and whether or not a reverse mortgage is right for you.

When is a reverse mortgage loan due?

Once one of these conditions is fulfilled, your loan will become due:

  • You move to a new residence
  • The property is not properly maintained
  • You neglect your house taxes and insurance payments
  • You pass away or decide to sell the  home

How much can you borrow with a reverse mortgage?

The amount you are permitted to borrow will depend on your age, the interest rate, and your appraised home value. The more equity you have in your home and the older you are, the more money you can borrow. Also, if you are borrowing money with your spouse, the age of the younger of the two will be used to determine the amount you are eligible to borrow. To get a better idea of what you can borrow, use this reverse mortgage calculator.

Once you are approved, how will your payment structure be set up?

You can receive your payments in a lump sum, as monthly payments, as a line of credit, or a combination of the three.

There are many variables that go along with a reverse mortgage. Make sure you know what to expect not only with the initial process, but also with the future of your home and how extracting payments will affect you and your heirs.

If you have any concerns about the reverse mortgage process, please don’t hesitate to contact one of our experienced reverse mortgage consultants at 888-790-0292. They are ready to answer any and all of your questions and help you decide the best option for your unique situation.

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