Reverse mortgages allow individuals to access equity from their home without having to leave it. This type of loan is typically sought by elderly individuals who are cash strapped and need an extra source of income.
The bank will purchase the home from the borrower, agree to finance it for the duration, and then sell it when the loan is completed. If you’re thinking about getting a reverse mortgage, this article will give a closer look into reverse mortgage lenders and what to consider before taking the plunge.What is a Reverse Mortgage
Reverse mortgages are a type of loan agreement used by homeowners to access their home’s equity while avoiding foreclosure. They are used especially by seniors who have limited income but still want to remain in their homes. With a reverse mortgage, the lender pays the borrower with a lump sum or several installment payments. Repayment of the loan is deferred until the borrower moves out of the home or passes away. Until then, the borrower pays no interest or principal payments. Borrowers interested in reverse mortgages must be 62 years of age or older and must have substantial home equity. The loan may be used to pay for repairs, medical bills, and other needs. Borrowed funds are not taxed, and usually no credit check is required to receive them. However, the borrower must keep current on property taxes and home insurance that remain the responsibility of the owner.
Important Considerations Before Getting a Reverse Mortgage