A reverse mortgage is a mortgage offered by the Federal government to senior citizens age 62 and over through a program overseen by HUD. Reverse mortgages allow homeowners to borrow a Gownsonlinesales portion of the equity they have in their home by taking a lump sum payment, monthly payments, as a line of credit or in some cases a combination of all three. The homeowner is not obligated to repay the loan until the homeowner dies or the homeowner discontinues living in the home.
How is a reverse mortgage different from a conventional mortgage?
In a conventional mortgage the homeowner makes a monthly payment to the lender and some portion of the payment goes towards equity and the remaining portion goes towards interest paid for the loan. When the loan begins a higher percentage of each payment goes towards interest but over time the portion of the payment allocated to interests decreases until the loan is finally paid of. With a reverse mortgage the homeowner has
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no required monthly payments. All interest that accrues over the life of the loan is added to mortgage balance and paid off after the homeowner dies.
What are the requirements for getting a reverse mortgage?
In order to qualify for a reverse mortgage the homeowner must:
What types of homes are eligible for reverse mortgages?
Only single family homes, duplexes, triplexes, quadplexes, and HUD approved condominiums/ manufactured Ball Gown Wedding Dresses UK homes that meet FHA requirements are eligible.
Understanding reverse mortgages can be very tricky but reverse mortgages can also be a useful tool for some individual in certain situations. Be careful when receiving advice and make certain to always contact a mortgage or financial expert before making any final financial decisions.
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