|
What Is A Reverse Home Mortgage And Why It May Be Useful To You
Joel Teo
Reverse mortgage, as the name suggests enables you receive money against equity on your home. It allows you to get money, without selling your home. However you need to repay the money after your death, while you sell your home or you stop living in the house. Many Americans, the age of 62 and above partly depend on reverse mortgage for different financial requirements like healthcare expenses, to supplement their retirement income or to pay off their mortgage.
Statutory laws pronounce reverse mortgage process generally tax-free and in most cases, without income restriction.
Types of Reverse Mortgages
Basically, there are three types of Mortgages
Single Purpose Reverse Mortgages, supported by local, state agencies or nonprofit organizations
They are low cost loans, usable for only a specific purpose, as specified by the lender. They are available to people with low to moderate income.
Federally Insured Reverse Mortgages, also known as Home Equity Conversion Mortgages (HECMs), backed by US Department of Housing and Urban Development (HUD)
Proprietary Reverse Mortgages offered by different companies
HECMs and proprietary reverse mortgages are costlier than single purpose reverse mortgages.
The value of the house is the total repayable cash and taking a reverse mortgage loan doesn't affect your other property or the property of your heirs.
Advantages of Reverse Home Mortgage
You can use the money you receive for any purpose, provided you don't take Single Purpose Reverse Mortgage loans. Pay taxes, cover insurance costs, etc. Fall in returns from CDs or IRAs force people to look for other means of income security.
There is no time limit for receiving money and you continue to receive money till you sell your property, or permanently move to a different house. You will never be asked to pay more than the value of your home and at the end of loan, your heirs will receive any surplus amount in the home equity.
However attractive it appears, a reverse mortgage is not for everyone, especially for very low income people. Such a loan can disqualify them from receiving aids, like Supplemental Security Income or Medicaid.
If you are a man or woman of 62 years or older, who is house-rich, cash-poor, you can opt for a reverse home mortgage. It will help you manage your cash flow problems, as and when it arises.
Copyright © 2006 Joel Teo. All rights reserved.
|
- Reverse Mortgage - Putting Your Equity to Work
If youre like many seniors, your home is your largest asset, and although you are concerned about the thought of borrowing against it, your house may be the only way to increase your income. Rising real-estate...
- Reverse Mortgage Loans
If you were to ask the average consumer to define the reverse mortgage concept, you would find very few able to do so. Many consumers, especially those who arent up on their mortgage products and their...
- Home Improvement Loans
Once you own a home, youll get the urge to make home improvements. Often, youll need a home improvement loan. Home Improvement LoansWhether youve lived in a home for years or just purchased it, youll...
- Best Home Equity Loan - Low Rate Home Equity Loans
Home equity loans are a practical way to obtain extra cash for a multitude of expenses. For example, if you need to finance an extensive home improvement project or your childs college expense, these...
- Is A Reverse Mortgage The Right Option For You?
Reverse mortgages are designed to provide those who are retired, or near retirement with a way to keep on getting an income, or money to meet other expenses as they grow older. While it may not be the...
- Smart Mortgage Moves In A Changing Market
For years, buying real estate has seemed like a "sure thing" investment. In many parts of the U.S., housing prices have gone up more than 70% over the past five years, and in a few red-hot markets like...
- Reverse Mortgages
Dont Consider Cashing in your Homes Equity Until You Read This!As an older american you can turn to a "reverse" mortgages to seek money to pay off your current mortgage, finance a major home improvement,...
- Home Equity Loan Vs. Home Equity Line Of Credit
The reasons to consider a second mortgage are as varied as the programs available to you once you make the decision to tap into your home equity. Some popular reasons include college tuition, bill consolidation,...
- Consider a Reverse Home Mortgage
You tried to put away money throughout your life for your "golden years." But with college tuition, weddings and ever increasing property taxes, it was rare to have much money left over to put into savings....
- Types Of Cheapest Home Owner Loan Lenders
You have many choices when searching for the cheapest home owner loan lenders. Your choices can range from local banks, finance companies, online lenders and mortgage lenders. Banks have been offering...
- Mortgage: for those twilight years
Tracing back, the concept of reverse mortgages began when one good soul, Nelson Haynes of Deering Savings and Loans wanted to help out the widow of his high school football coach. Today that small act...
- Home Equity Mortgage-Refinance
A home equity mortgage refinance may be a great way to go right now, before rates go up. Over the last few years everyone has heard about friends and family refinancing their home mortgage. Well, you may...
- Reverse Mortgage Maximization
Have your homes appreciation grow twice as fast.For Seniors over the age of 62 a Reverse Mortgage is a tool that, while new to many, is increasingly being used to maximize their retirement income. A Reverse...
- Is Cash-Out Refinancing Right for You
John wants to borrow $30,000 from the equity he has in his home to make home improvements. Mortgage rates have dropped 4% since John took out his mortgage and he has $100,000 left on his mortgage. Should...
- Understanding Reverse Mortgages
Understanding Reverse MortgagesA reverse mortgage is one of many vehicles that individuals 62 years of age or older can use to turn the equity in their home into cash. It is very important, though, for...
- What is a Reverse Mortgage?
Simply stated, a reverse mortgage is a loan that enables homeowners (age 62 and older) to convert part of the equity in their home into a tax-free income without having to sell the home, give up the title,...
- Finding Home Equity Line Of Credit Information
Both before and after you get a home equity line of credit, it is important to make sure that you have adequate information. Before you get the home equity line of credit, you should have as much information...
- Home Equity Refinancing and Home Equity Loans
What are home equity loans, home equity lines of credit, and home equity all about and what is the deal with home equity refinance? The following article will help you answer all of these questions.For...
- Reverse Mortgages Fees
Majority of the costs paid by someone to get a home purchase loan, existing mortgage refinancing are the same fees paid in reverse mortgages. In most cases, capping and financing these fees and costs can...
- How Do You Know if You Need a Reverse Mortgage?
With the growing popularity of Reverse Mortgages across the country, more and more seniors are asking themselves, "Do I need a Reverse Mortgage?" This question can be answered by using several different...
- Reverse Mortgages
Reverse (lifetime) morgages are different from ordinary home morgages, in that they dont require payment, but instead allow the borrower to acquire a debt during their period of property ownership. The...
|
| | |
