Are you 62 years old or older and having trouble meeting your monthly debt obligations? Are you retiring and worrying about how to make all of your monthly payments when your income drops, a Reverse Mortgage could be an option for you.
Imagine your retirement years not having to make a mortgage payment. Better yet, imagine your retirement years where your mortgage company mails you a check every month for 30 years. This is all possible with a Reverse Mortgage.
Many Ways To Structure Reverse Mortgages
There are many variations to how you can get a reverse mortgage. You can get an upfront cash loan paid in one lump sum, monthly installments paid to you or a line of credit you can draw on when needed. A combination of these three methods is also possible.
What Does It Take To Qualify?
Qualifying for other types of loans involves checking income and ability to repay. For Reverse Mortgages, there are no minimum income or debt ratio requirements. Your credit history does not matter, it is not a factor in whether you get a reverse mortgage or not. In fact, the only eligibility requirements are that you must own your home, have some equity in it, and you must be at least 62 years of age. You may get a reverse mortgage even if you already have a mortgage on your home.
Compare A Reverse Mortgage With A Forward Mortgage
A comparison of a reverse mortgage with a traditional mortgage, called a Forward Mortgage, shows they both create debt and equity, but in different ways. For the reverse mortgage, money owed to a lender includes cash and interest you've received from the lender either in a lump sum or in some sort of periodic installment. The situation that you get into with a reverse mortgage lowers the amount of equity that you have in your home over time.
In a forward mortgage, where you may get the money, or the money is paid to the seller if you are purchasing a home, or to your mortgage company if you are refinancing, the lender loans all of the money upfront and you begin making monthly payments. This repayment process reduces the debt on your home and raises the equity in your home.
What Are The Advantages Of A Reverse Mortgage
One advantage to Reverse Mortgages is that eligible home owners are able to use their equity for income and not have a monthly mortgage payment. Another advantage of Reverse Mortgage loans is that you do not have to repay any of the loan until you die, decide to sell or move out of your home.
With all the advantages, features, and benefits of this loan program that is only eligible to senior citizens who own a home you can cut your debt payments dramatically if you get a reverse mortgage. There are only certain companies who can do them so be careful who you try to get this loan from. Make sure when you begin talking with a loan officer that you ask them if they are approved to do reverse mortgages. If they are not, keep looking.
