Who qualifies for the reverse mortgage?
For starters, a borrower should be more than 62 in most cases. The borrower also should list the home as their main residence and live there during the period of the year. When you get yourself in a situation where you want more cash to pay bills and you could not find the money anywhere else to recompense it, then a reverse mortgage is a remarkable option. When you have large medical expenses, or property taxes that you can’t pay, or when you need funds to relieve yourself of the loan, all these are good reason to get a reverse mortgage.
How Does a Reverse Mortgage Work?
Provided the fact that you live in the home, repayment isn’t needed. The amount of money that you borrow increases the longer you stay in your home. Therefore, the longer you stay in your home, the less equity you have. In the early years of the mortgage is when it is the most expensive. If you do this kind of loan, the lender gets all of your equity. Closing costs involved includes appraisal, origination fee, insurance fee, recording fee etc. Sometimes closing expenses are financed by means of loan itself. The age of the borrower, home value, home equity and kind of loan all plays an essential role in knowing the amount of money you obtain for your home.
One drawback of this kind of loan is the soaring financing fees. You can expect to disburse six percent of your home appraised value, which include 3rd party costs for closing fees, insurance premium, and a servicing fee. There is also a mandatory 125 dollar financial counseling charge required.
When to Use a Reverse Mortgage
For a lot of baby boomers, SS or Social Security check is the main source of profits in retirement with an average of 1,230 dollars per month, this is according to the research conducted by University of Wisconsin. Study shows the 2/3rds of baby boomer that worked in private sector don’t have retirement’s income apart from Social Security. That breeds panic as well as doubt for a lot of seniors.
How to Know if a Reverse Mortgage is Genuine or Not
Scammers utilize lots of diverse tactics and ways to trick many homeowners into dishonest deals. Below is the list of factors to consider when it comes to getting a reverse mortgage.
- Does the loan lend take so much time to know your condition and inform you
- Doe the loan lender let you select your own loan counsellor or he or she tries to choose one ideal for you.
- Is the loan lender asking for fee upfront?
A reverse mortgage is ideal for you when you are in your senior years, have very big debt pileup, and have equity in your property or home. To know if it a reverse mortgage is right for you, call a reverse mortgage counseling expert today. It can be just the mortgage you have been looking for.