Reverse Mortgages Basics Made Easy
What is a Reverse Mortgage?
A reverse mortgage is a loan against your home that you don’t have to repay as long as you live there. You must be at least 62 years of age or older and your home must be your primary residence.and
Reverse Mortgage Explained!
When you purchased your house you had a regular or forward mortgage (15 year, 30-year, or adjustable rate, etc.), and as you made your monthly loan repayments your mortgage debt continued to go down over time until you’ve have paid off your mortgage in full or lowered it significantly. Meanwhile, your equity begins rising as you repay your mortgage and your property value continues to appreciate over time, building even more equity. With a reverse mortgage, you now go full circle, from owning very little of your home when purchased, to now owning a all or majority of your home. Now your hard work and investment are paying off. With a reverse mortgage you can utilize your home’s equity and turn it into a useful liquid (cash) asset for any purpose you choose. The best part is you get to utilize your equity and still stay in your home.
How does a Reverse Mortgages Differ From Regular Mortgages?
There are 3 Important Ways:
- To qualify for a regular or traditional mortgage, the lender checks your income to see how much you can afford to pay back each month. With a reverse mortgage, however, you don’t have to make monthly repayments. Therefore, your income is not a requirement for a Reverse Mortgage.
- With a regular mortgage, you can lose your home if you don’t make your monthly repayments, however, with a reverse mortgage you can’t lose your home by failing to make monthly loan payments because you don’t have any payment to make.
- When you qualified for your original purchase, the lender checked you credit to make sure you paid your bills on time, used a credit score, and calculated your percentage of debt to your income. However, with a reverse mortgage, we don’t look at your credit score or debt ratios
Here are some of the commonly asked questions:
Can you lose your home if you do a reverse mortgage?
- No. As long as you or your co-borrower remain in your home, you can not lose your home. Obvkously, you are required to pay your property taxes, homeowners insurance and maintain the home, just as you do now.
How do I know if I qualify for a reverse mortgage?
See if you are eligible:
- You must own your home. All of the owners must be at least 62 years old or older.
- Your home must be your principal residence.
- For the federally insured Home Equity Conversion Mortgage(HECM), your home must be a single-family property, a 2- to 4-unit building, condo, townhouse, and manufactured homes built after 1976.
- If you have any debt or lien against your home, it can be paid off at the reverse mortgage settlement.
Our goal is to insure that you feel comfortable about the ins and outs of a reverse mortgage.
If we can help make next month better for you than this month, please give us a call or complete the short Information Request.
For more information CLICK HERE, or call us at 302-266-9500 or toll free 877-266-9500