You probably have heard about reverse mortgages on the television, radio or internet and are quite curious if this type of loan is a good option for you or not. You may become highly interested in reverse mortgages once you know their purpose as well as the benefits that they have to offer. This will answer your questions as to whether it is a good option for you or your parents
Deciding to get or not to get a reverse mortgage is a move that requires much thinking. The mortgage can be an opportunity or added burden depending on your situation. Arriving at a good decision comes after knowing what reverse mortgages are all about and how they can provide you with bunches of advantages. Follow the link to learn more about New York reverse mortgage information.
Understanding the Basics
Plenty of senior citizens or retired employees find themselves to be of a limited financial resource but with a big amount of home equity. A reverse mortgage, sometimes termed as equity release, is a tool that works by allowing people to take out the equity from their homes without requiring owners to sell the homes nor to make payments. As the name implies, reverse mortgages are the reverse of the mortgages that people know about.
When a home is mortgaged, part of its total value goes to you as the owner of the house and part goes to the lender who provided the loan. With traditional mortgages, you need to make a payment to the lender, usually every month, thereby augmenting the amount you own and proportionally decreasing your debt to the lender.
With a reverse mortgage, it is the lender who provides money to the owner of the house. Certainly, the debtor can get back the equity of the home by means of a loan. Therefore, reverse mortgages increase debt and decrease equity. Later on, the amount of equity will turn to zero. While you are staying in the house, you keep the title of the property and make no payments to your lender.
Home Equity Conversion Mortgage (HECM) is the most common among people availing loans, especially the seniors. A reverse mortgage is often referred to as HECM. Click here to learn if manufactured homes qualify for reverse mortgage.
How would you know if you can get a reverse mortgage? Basically, plenty of qualifications must be met in order for one to get a reverse mortgage. You can be qualified to get this type of loan if you are 62 years old or beyond. Your primary residence must be the home that you want to be linked to a reverse mortgage. Additionally, the home should have a certificate of occupancy.
These are just a few of the total qualifications to be met upon getting a reverse mortgage. Unlike the traditional mortgages, financial standing is not considered since you don’t make payments.
Retirement Mortgages 