Are you Eligible for a Reverse Mortgage?
You might be asking yourself if you can qualify for a reverse mortgage. But what is reverse mortgage anyway? This is actually a type of loan that older homeowners get to access equity in their homes. On the contrary, instead of making monthly payments, you eliminate this and you can get extra money. This is for individuals who want to turn home equity into cash. Similar to the regular mortgages, these include fees, eligibility and terms.
In order to avail of a reverse mortgage, you have to be 62 years old and above. You own a single-property home or any other property. It is recommended that you are a residence of that home so that you would be granted the loan. A great thing about this is that you can pay other loans using the proceeds that you get from your reverse mortgage. It is pretty convenient.
If you are eligible for this, make sure that you know all the fees and the costs that come with it. Reverse mortgage interest is the interest that you pay with the borrowed money. You can have the costs bundled with the loan so that you do not have to pay upfront. You can obtain the money in different ways. It can be given in lump sum, periodic payments or a line of credit. The fastest and the easiest is getting a lump sum. You get the balance all at one. With periodic payments, you will get regular payments. This is good if you want to have a certain budget every month and this is easier to control. These payments may last for a number of years on when the loan is due. This is usually upon your death or if you move out of your home. The line of credit is something to consider if you know how much youâ'll spend or how soon you will need it.
If you cannot decide, you can in fact choose from a combination of payment schemes mentioned above. You can keep a small lump sum and keep a line of credit at the same time. This is good if you just need to pay a certain debt with your reverse mortgage loan.