Larry McAnarney
815-703-4745
How Does a Reverse Mortgage Work?
Understanding How a Reverse Mortgage Works
A reverse mortgage, often referred to as a Seniors reverse mortgage, works similar to a home equity loan, in as much as you are borrowing the equity in your home. The big difference is that a reverse mortgage does not have to be paid back, so long as you live in your home, or until the last borrower passes away.
Basic reverse mortgage requirements are:
- >> Borrowers must be Age 62 years or older
- >> Own their home and have enough equity in to qualify
- >> Occupy the home as primary residence
- >> Receive counseling by an approved HUD/FHA counselor
Notice that there were no credit requirements, no income requirements, and no health or medical requirements. The reverse mortgage is actually fairly easy to obtain, but caution should be excercised, as product is not right for everyone.
Reverse Mortgage Payment Options
- >> Lump Sum Disbursement
- >> Monthly Payments
- >> Line of Credit
- >> A combination of the Above
Some people refer to reverse mortgage proceeds as "Free Money" but this is certainly not the case. The loan does have to be repaid (eventually) along with Interest and fees, and the Reverse Mortgage Fees can be substantial. However for many seniors struggling to retire in comfort, the reverse mortgage is a life saver.
There are some situations where a reverse mortgage may not be a good idea. For more information, please visit Disadvantages of a Reverse Mortgage. You may also request free Reverse Mortgage Information just by Contacting us online. We will be able to counsel you to determine if a reverse mortgage is right for you.