Tuesday, September 04, 2007

What is a Reverse Mortgage?

Simply stated, a contrary mortgage is a loan that enables homeowners (age 62 and older) to convert portion of the equity in their home into a tax-free income without having to sell the home, give up the title, or take on a new monthly mortgage payment. More and more than homeowners are using this to supplement their retirement income, wage for wellness care, modify their home, or just get some cash for emergencies. Since this is a new product, some people have got misconceptions of what a contrary mortgage is. The bank doesn’t give you money and take your house. Let’s expression at some of the most common questions.

Are contrary mortgages for desperate people? No. It is an first-class financial planning tool used from people of all walkings of life.

How make I qualify? You must be 62 or if both political parties are on the mortgage, then you both must be at least 62. And, you must have got equity in your home.

What if I still owe on my home? You may still measure up even if you have got a balance on your first mortgage. The return must be used to pay off the mortgage, first.

How much tin I get? This depends on respective factors such as as, the age of your home, the value, your age at the clip of closing, and interest rates.

Is it just monthly payments? No. You can get a lump sum, line of credit, monthly payments or a combination of monthly income and a line of credit.

But, won’t Iodine have got to pay taxes on these monthly payments to the government? No. The finances are tax-free. Its your money, not further income.

Should Iodine seek a lawyer or have some counseling before I get a contrary mortgage. Yes. You must be counseled before receiving a contrary mortgage. You don’t have got to speak to a lawyer or accountant, but it would be advised.

Who have the statute title to my house? You still ain the title.

What haps when I die? Once your home is passed on to your heirs, the mortgage goes due. Your inheritors may pay the mortgage and maintain the home or sell the home and pay off the home. They may maintain any surplus sales proceeds.

What if I owe more than than the house is worth? You can’t. Your repayment amount will never transcend the value of the home at the clip the loan come ups due. Also, there are no prepayment penalties.

What if I move? If you move, then the mortgage goes owed and must be repaid.

Where can I learn more? The National Change By Reversal Mortgage Lenders Association at http://www.reversemortgage.org


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