A simple reverse mortgages explanation
A reverse mortgage is an excellent way to deal with the financial uncertainty that many seniors experience. Retirement sometimes isn't that easy on the financial side and a reverse mortgage is the ideal way to change that.
For many seniors, income is low compared to the days when they were working. Not only that, costs are rising. Especially living costs and medical costs. What many seniors do not realize, is that they can use their house to access extra funds to enjoy retirement. This is where the reverse mortgage comes in. A reverse mortgage enables a senior to use the equity that's built up in a house and turn it into cash.
A reverse mortgage does not take away ownership of the house. The house still belongs to the senior and they are free to profit from a rise in the home value in the future. The homeowner can pay off the reverse mortgage at any time, or not at all if he so chooses. When the titleholder passes away, the reverse mortgage is paid off first by the proceeds of the sale of the house.
In order to qualify for a reverse mortgage, a senior must be at least 62 years old. There must be at least some equity in the home, in order to provide the collateral for the reverse mortgage. Current income is not important and neither is credit history. Sometimes, there is still a small mortgage left, or there is a lien on the home. Many times, these remaining debts are paid off by the proceeds from the reverse mortgage at closing.
The best thing about a reverse mortgage is that the homeowner is free to spend the money as he sees fit. Many times it's used for home improvement, travel and enjoying retirement by having extra financial possibilities. The amount of the proceeds of the reverse mortgage depends on the age of the senior and the amount of equity in a house. With no monthly payments needed, a reverse mortgage is an ideal way for any senior to supplement income in these slim times.
For many seniors, income is low compared to the days when they were working. Not only that, costs are rising. Especially living costs and medical costs. What many seniors do not realize, is that they can use their house to access extra funds to enjoy retirement. This is where the reverse mortgage comes in. A reverse mortgage enables a senior to use the equity that's built up in a house and turn it into cash.
A reverse mortgage does not take away ownership of the house. The house still belongs to the senior and they are free to profit from a rise in the home value in the future. The homeowner can pay off the reverse mortgage at any time, or not at all if he so chooses. When the titleholder passes away, the reverse mortgage is paid off first by the proceeds of the sale of the house.
In order to qualify for a reverse mortgage, a senior must be at least 62 years old. There must be at least some equity in the home, in order to provide the collateral for the reverse mortgage. Current income is not important and neither is credit history. Sometimes, there is still a small mortgage left, or there is a lien on the home. Many times, these remaining debts are paid off by the proceeds from the reverse mortgage at closing.
The best thing about a reverse mortgage is that the homeowner is free to spend the money as he sees fit. Many times it's used for home improvement, travel and enjoying retirement by having extra financial possibilities. The amount of the proceeds of the reverse mortgage depends on the age of the senior and the amount of equity in a house. With no monthly payments needed, a reverse mortgage is an ideal way for any senior to supplement income in these slim times.
About the Author:
Mijnadviseur writes articles about mortgages in English, he also writes articles about beleggingshypotheek and hypotheekrente berekenen in Dutch.
posted by Debt Consolidation Loan at
1:54 PM
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