Understanding Reverse Mortgages
Posted on | August 26, 2010 | No Comments
As a homeowner, you have options. Depending on your age and financial situation, you have varying needs, and refinancing options are viable for those who meet certain qualifications. Reverse mortgages are often helpful to senior citizen homeowners. A reverse mortgage involves the lender paying the homeowner either a lump sum, or installments based on the equity of the home. The loan is then deferred until the homeowner has passed away, the homeowner moves, or the home is sold.
There are several requirements for reverse mortgage eligibility including what the loan money can be spent on, and the specifics of the lien, or legal hold on the property. Also, the reverse mortgage must be the only loan taken out on the home, and the borrower must be at least 62 years old. The process in determining the amount of money loaned includes a detailed appraisal of the house, the age of the senior citizen, and whether the loan will be given in a lump sum, or installments. There are benefits to, and criticisms of reverse mortgages, but for many senior citizens the benefits make a reverse mortgage a helpful option.
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