Reverse Mortgages are becoming more and more popular
Reverse mortgages have been helping homeowners just like you get the most out of the equity they have in their homes. Rather than letting the value just sit there, reverse mortgages allow you to use that equity as collateral for a low-interest loan. It’s important to recognize the difference between a reverse mortgage and a home equity line of credit, second mortgage, or home equity loan. With the latter 3, you’re forced to deal with strict credit requirements and income specifications. A reverse mortgage does not act like a typical loan. Rather than making scheduled payments to pay the loan down, you’ll begin receiving payments as part of the reverse mortgage. The reverse mortgage program is designed to give homeowners 62 years of age or older the ability to make the most of the value they have created in their homes by essentially cashing it in without having to actually sell the house.
Reverse mortgage requirements
In order to be approved for a reverse mortgage, a homeowner must be at least 62 years old. However, unlike virtually any other loan program, a reverse mortgage has virtually no credit or income requirements. Instead, it only requires:
The home be owned free & clear
All liens be put to rest with the reverse mortgage
Almost all home types are eligible for a reverse mortgage. If you own a mobile home, there are a few requirements that must be met including land ownership and FHA inspection approval. Almost anyone 62 or older is eligible to reap the benefits of the FHA reverse mortgage plan.
You’re probably wondering how a reverse mortgage would affect the estate you are looking to pass on to your loved ones.
Luckily, if the homeowner moves out or passes away, a reverse mortgage allows for the house to be sold rather than paying off the balance directly. And if you’re worried about your loved ones having to cover the loan if it exceeds your home’s total equity, there’s no need to fear.
The lender is forced to request reimbursement from the Federal Housing Administration or take a loss if the sale of the home isn’t enough to pay off the loan entirely, which means your loved ones won’t be on the hook for that amount.
There are a variety of different payout methods by which you can receive your reverse mortgage check. Options include:
Lump sum payout
Splitting payments up by term or tenure
Extending a line of credit until the equity is exhausted
Combine any of these methods so that the custom plan is right for you!
An FHA Reverse Mortgage may be right for you
If you’re tired of seeing your home investment go to waste and are interested in making it work for you, an FHA reverse mortgage may be the way to go. Give us a call today and we can help determine if a reverse mortgage is right for you. We’ll help you get past the hurdles and determine exactly how large a loan you may qualify for, while simultaneously finding you the lowest mortgage rate around. Don’t waste another minute. Give us a call today and start making the most of what you have worked so hard for.