Reverse Mortgage ProgramA reverse mortgage is a type of home equity loan that lets you use equity in your home to generate cash flow as long as you continue to own your home. Reverse Mortgage is like a traditional mortgage, but in reverse. Instead of making a payment to a lender each month, the lender pays you. Most conventional home equity loans require the repayment of principle, interest and servicing fees on the loan, but a reverse mortgage do not as long as you live in your home. Funds from a reverse mortgage can be used for any purpose, and are often used for meeting housing expenses such as taxes, insurance, fuel and maintenance costs. You must own your home to qualify for a reverse mortgage. The funds from a reverse mortgage can be paid in a lump sum, in monthly advances, or as a line-of-credit that you draw from when needed. It might also be paid in combinations of any of the three, depending on the nature of the reverse mortgage and the lender. The amount that you are allowed to borrow is based on your age, the equity amount in your home, and the interest rate being charged by the lender. You retain the title to your home with a reverse mortgage, so you remain responsible for taxes and any repairs or maintenance. Depending upon the type of reverse mortgage you have, the loan and any interest becomes due when you permanently move, sell the home, die, or reach the end of a specified loan term. The lender does not take the title to your home when you die, but it is up to your heirs to pay off the loan. Most of the time, the debt is repaid by refinancing the loan in to a "forward mortgage", (assuming the heirs can obtain this type of loan), or by using the funds from the sale of the house. |
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