A reverse mortgage is a great loan option for many seniors. Whether you’re looking for additional monthly income, a lump sum of cash, or to have no more monthly mortgage payment simply, a reverse mortgage may be right for you.
You have to be at least 62 to get a reverse mortgage and have substantial equity in your home. A reverse mortgage converts a portion of a home’s equity into cash. You can remain in their home and receive either tax-free supplemental income or a lump sum, without the risk of losing the title to their home.
You won’t have a mortgage payment for as long as you stay in the home as your primary residence. However, you must remain current on your property taxes and home insurance, as well as maintain your home, or you can lose your home.
Your loan balance is repaid from the sale of your home after you no longer use it as your primary residence or pass away. If your house is worth less than you owe, your lender can’t come after you or your heirs for any money.
The most common form of a reverse mortgage is commonly referred to as a Home Equity Conversion Mortgage (HECM). A HECM is federally insured by the FHA (Federal Housing Administration) and HUD (US Department of Housing and Urban Development).
Before you take out a reverse mortgage, you must receive counseling from a government-approved agency. The counseling helps protect you from taking out a reverse mortgage when it is not the right choice and assists you in understanding how the fees you will pay are charged. Pay close attention during your counseling session, to ensure that you know the risks of a reverse mortgage, as well as the rewards.
Use Bills.com to learn more about the pros and cons of reverse mortgages and to see what it takes to qualify for a reverse mortgage loan. You can Ask Bill a question about reverse mortgages and read answers to questions that other readers have asked.
You can also get a reverse mortgage rate quote from a pre-screened member of Bills.com’s lending network.