are designed to provide those who are
retired, or near retirement with a way to keep on getting an
income, or money to meet other expenses as they grow older.
While it may not be the way for everyone, it certainly is a
valid option for many. Here are some things you need to know
about reverse mortgages to help decide if one should be in your
near future.
What Is It For?
The purpose of a reverse mortgage is to provide some income so
that a person 62 and older can be able to continue at a higher
level of living than what social security alone could do. This
is especially important because of the way that social security
and the economy is headed.
Where Does The Money Come From?
The money comes from the equity that is built up in the house
over the years. This means that the more equity there is, the
greater the payments could be. The amount of money that is
still owed on any outstanding mortgages is paid off
immediately, and payments are based on the balance.
What Are The Qualifications?
A reverse mortgage is for any homeowner that is aged 62 or
older. They must be a homeowner and have some equity in the
home. There are absolutely no conditions as far as amount of
income needed since you actually make no payments to them. This
means anyone can qualify.
What Are The Terms?
As long as the named individual lives in the house, no payment
needs to be made. An individual can also put their spouse or
another named person onto the mortgage, so that it will not
need to be sold to make repayment until the house is no longer
needed.
How Is The Money Received?
The way that you receive the money is largely left up to your
choice. This is because it is your money and you are free to
use it as you wish. You can get a lump sum – if you want, or
one of several other options. There is the option of getting
monthly payments, or monthly payments over a specified period
of time, and a line of credit is possible, too. You can also
get a combination of any of these, too.
Is The Estate Lost?
You are able to keep your estate when the home is sold. Profits
can be made from the sale
if the home sells for more than was paid out and applied to the
estate.
What Charges May Apply?
Just like most mortgages, a reverse mortgage has most of the
typical fees that apply to any mortgage. There are closing
costs and service fees that will probably bring it up to
somewhere between five to seven thousand dollars.
You want to take the necessary time to look over all the
details when you start thinking about getting a reverse
mortgage on your home. Federal reverse mortgages require
professional counseling in order to help you understand all the
issues and help you to be sure of your next decision to get one.
Compare several offers in order to be sure you are getting the
best deal.
About The Author: Joe Kenny writes for the UK personal finance
sites http://www.ukpersonalloanstore.co.uk/mortgages.html and
also http://www.nationsfinance.co.uk/mortgages
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