Reverse Home Mortgage Loan!Some Tips Before You Sign

Reverse Home Mortgage Loan!Some Tips Before You Sign

The typical needs, why people take the reverse home mortgage loan is the home repair, extra medical bills, purchase of a home for a child, the payment of the running mortgage or just to get additional cash for daily costs.

1. In Brief: You Get Cash But Can Live In The Old Nice Home.

The reverse home mortgage loan is a loan against your present home, i.e. you will eat the saved capital. There is nothing wrong, because you have paid every penny of it and you really need the money. Despite of the fact, that the reverse home mortgage loan is a loan, there is no monthly payments. All costs will be deducted, when the loan will be paid back.

2. There Are 3 Product Types.

The single purpose reverse home mortgage loan is aimed for a certain purpose, which the government or the nonprofit lender will determine. These loans are not available everywhere and they are the cheapest product types.

HECM or federally insured reverse mortgages and the proprietary reverse mortgages have upfront costs, which make them costly than the single purpose one. HECM loans have no income or medical requirements and they are widely available.

The law says, that before you apply for HECM you have to talk with the government approved housing counseling agency, where the counselor tells you about different choices, costs, fees and different payment options. This is not free, you have to pay around $ 125.

3. How Big Reverse Home Mortgage Loan You Can Get?

To say it generally, the bigger is the value of your home, the older you are, the smaller the loan amount is in your present home, the more you can borrow. As to the payments, you can get a monthly sum during a decided amount of months, the monthly sum as long as you live, a credit line or a combination of the monthly sums and the credit line. Also the one time slump sum plus monthly payments are possible.

Usually you get bigger reverse home mortgage loan using HECM with lower total costs compared with proprietary loans. Using proprietary loan and if you have a more valuable home, you may get greater loan. If your home has a higher appraised value and you have a small mortgage, you may qualify for more funds.

As an owner, you have to pay the property taxes, insurance, utilities, fuel, maintenance, and other expenses. If you do not pay the property taxes and the insurance of the home owner or keep the condition of your home, your loan may become due and payable.

Before you sign any agreement, it is wise to shop around. The reverse home mortgage loan is like whatever product. So it is really useful to talk about different alternatives and ask, whether this loan type fits for you.

Juhani Tontti, B.Sc., Marketing. Are You Interested Of The Senior Reverse Mortgage And Want To Know How Does A Reverse Mortgage Work? Visit: Reverse Home Mortgage Loan