Unlike conventional mortgages, where the homeowner makes payments to the lender, a Reverse Mortgage actually has the lender making payments to you.
Basically, equity-rich, elderly homeowners get cash (monthly or in a lump sum) in return for a mortgage on their home. The amount, of course, is determined by the amount of equity in the home.
A strategy commonly used to supplement income, a Reverse Mortgage is only one of the ways of tapping into the value of your home.
Speak with your mortgage specialist to determine if this plan makes sense for you.In a typical mortgage the homeowner makes a monthly amortized payment to the lender; after each payment the equity increases within his or her property, and typically after 30 years the mortgage is paid in full and the property is released from the lender. In a reverse mortgage, the home owner makes no payments and all interest is added to the lien on the property.
Reverse mortgages are becoming increasingly popular throughout the nation. Reverse mortgages are a tremendous opportunity for those elderly retired consumers who may have some concerns about whether they have enough put away to retire on. A reverse mortgage can provide that extra necessary income to help you to be able to enjoy life. Reverse mortgages are mainly based on the equity in your home and your age. Income and employment do not have any factor on whether you qualify for a reverse mortgage or not.
Reverse mortgages may qualify a consumer to pay off their liens on their property, take out out a small lump sum at closing, and still receive a monthly payment from their reverse mortgage. Check with your mortgage professional for available options.
Reverse mortgage loans are not heavily reliant on your credit score. Instead, the mortgage company examines your home, its market value, and the amount of your current mortgage to determine how much equity is available for you to receive cash against.
