What a Reverse Mortgage is and What You Need to Know Before Borrowing
Most homeowners are very well familiar with what a mortgage is. A mortgage is a loan, usually provided by a banking institution to help pay off a home. Mortgages typically comprise of the bulk of a family’s debt.
There is also a special type of loan known as reverse mortgage. Not too many people are familiar with this terminology. As the name suggests, it is basically a mortgage that works in reverse. Instead of receiving a loan to pay off your home, you are given a loan with your home equity as the collateral. It is designed to benefit seniors who need a supplemental source of income. Those who reach the age of 62 are eligible to apply.
Seniors typically work less though they may still have debts that need to be paid off. With a reverse mortgage, seniors receive an extra source of cash flow that can be used in any way they please, such as paying off their bills or health care expenses. You can speak with a reverse mortgage texas lending institution to learn more.
A reverse mortgage Austin lender can provide you with more details about how the process works and the type of loan you may qualify for. Once approved, the loan will come either in the form of monthly payments, a line of credit or lump sum.
A reverse mortgage Houston agent can get in touch with you and provide you with the exact details and the documents you need to submit. You should also learn of the reverse mortgage pros & cons. After all, this type of loan may not be for everyone.
As for reverse mortgage pros, it is a loan that allows seniors to borrow the money they need; the debt is normally not repaid until the borrower either dies or moves out of the home. There are also no credit or income requirements as is normally the case with traditional mortgages.
There are also reverse mortgage cons, and this is something that potential borrowers especially have to be mindful of. For one thing, this is a type of loan and not free money provided by the government, which is a common and grave misconception. The rate can also be quite high. Also, since you are borrowing on your home’s equity, there may be less available for your heirs to inherit upon your passing. Always consult with a reverse mortgage Utah lending agency to learn what the exact terms and conditions are.
For more reverse mortgage information, you should visit Reverse Mortgage Calculator. This site provides everything you need to know about how the loan works and what you need to know to become a responsible borrower. It also provides reverse mortgage calculators, which are useful for determining instant and accurate loan comparisons. This helps you determine the amount you are eligible for and the rates based on the value of your home. The site also provides information on the FHA reverse mortgage, which is the official loan program under the U.S. Department of Housing and Urban Development.