In these times of financial insecurity, many of us are struggling to make ends meet, none more so than the elderly. However, reverse mortgages for seniors are an option to relieve monetary stress should it start to become overwhelming for them.
While they may not be the answer for all, they can be the ideal solution for many who are facing monetary difficulties.
So, what is a reverse mortgage? Well, it is a type of home equity loan that requires no repayments until either the property is sold, the homeowner no longer uses the property as their permanent residence, or the homeowner dies.
Since the decision by the bank or finance company is not based on the homeowners income, these reverse mortgages are fairly easy to obtain for the more elderly members of our society, particularly so because they have most of their money tied up in their property, which is what these types of mortgages are leveraged on.
There are some non negotiable stipulations though, including...
- The age of the homeowner must be over 62
- The property in question must have been paid for in full, or have just a small balance remaining on the mortgage
- Insurance and taxes must continued to be paid by the homeowner
- The homeowner must attend a counseling session to ensure that they completely understand the reverse mortgage process
What happens with a reverse mortgage is pretty simple to understand. The homeowner is given a loan based on the equity in their home. The amounts of the loans will vary, depending on the value of the home and the equity therein.
The homeowner can opt to receive monthly payments, a line of credit or a single lump sum payment; whichever suits their needs best. The funds received by the homeowner can be used in any manner he/she desires; paying bills, making home improvements, taking a trip or any other purpose.
As part of the reverse mortgages for seniors system, no repayments may ever need to be made by the senior citizen. Well, no repayments until certain conditions are met anyway. Full repayment of the mortgage is due when one of the following occurs:
- Death of the homeowner
- The property is sold by the homeowner
- The homeowner permanently leaves the property; i.e., taking up residence in a nursing home, with a family member or hospice facility
So, there are clearly some major benefits to be had from reverse mortgages. It should be noted, however, that there is a large closing fee due when the mortgage papers are signed; larger than the costs associated with a traditional mortgage.
Reverse mortgages for seniors are not a decision to be taken lightly and, as with all financial decisions, all paperwork should be closely examined before making a commitment. Don't let the paperwork put you off though as professional assistance and counseling is available. - 29969
While they may not be the answer for all, they can be the ideal solution for many who are facing monetary difficulties.
So, what is a reverse mortgage? Well, it is a type of home equity loan that requires no repayments until either the property is sold, the homeowner no longer uses the property as their permanent residence, or the homeowner dies.
Since the decision by the bank or finance company is not based on the homeowners income, these reverse mortgages are fairly easy to obtain for the more elderly members of our society, particularly so because they have most of their money tied up in their property, which is what these types of mortgages are leveraged on.
There are some non negotiable stipulations though, including...
- The age of the homeowner must be over 62
- The property in question must have been paid for in full, or have just a small balance remaining on the mortgage
- Insurance and taxes must continued to be paid by the homeowner
- The homeowner must attend a counseling session to ensure that they completely understand the reverse mortgage process
What happens with a reverse mortgage is pretty simple to understand. The homeowner is given a loan based on the equity in their home. The amounts of the loans will vary, depending on the value of the home and the equity therein.
The homeowner can opt to receive monthly payments, a line of credit or a single lump sum payment; whichever suits their needs best. The funds received by the homeowner can be used in any manner he/she desires; paying bills, making home improvements, taking a trip or any other purpose.
As part of the reverse mortgages for seniors system, no repayments may ever need to be made by the senior citizen. Well, no repayments until certain conditions are met anyway. Full repayment of the mortgage is due when one of the following occurs:
- Death of the homeowner
- The property is sold by the homeowner
- The homeowner permanently leaves the property; i.e., taking up residence in a nursing home, with a family member or hospice facility
So, there are clearly some major benefits to be had from reverse mortgages. It should be noted, however, that there is a large closing fee due when the mortgage papers are signed; larger than the costs associated with a traditional mortgage.
Reverse mortgages for seniors are not a decision to be taken lightly and, as with all financial decisions, all paperwork should be closely examined before making a commitment. Don't let the paperwork put you off though as professional assistance and counseling is available. - 29969
