What is a Reverse Mortgage?

By Christian Rios [ 25/10/2007 ]

Reverse mortgages are government insured home loans specifically designed for senior homeowners. This type of loan allows a homeowner to payoff their existing mortgage along with a combination of the following: establish a credit line, receive monthly checks, or withdraw cash. The amount of cash available depends on many factors, which we will discuss shortly.

If you choose to get cash with your reverse mortgage loan, you can choose from the following methods:

Tenure – equal, monthly payments.

Modified Tenure – line of credit combined with monthly payments.

Term – equal, monthly payments for a fixed period.

Modified Term – line of credit combined with monthly payments for a fixed period.

Line of Credit – payments or installments at the borrower’s discretion (much like a standard credit line – use the money only when you choose to).

Perhaps the most worthwhile benefit of a reverse mortgage is that the borrower will not be required to make any mortgage payments for the duration of their stay. That’s right: zero payments for the rest of their life or until they move from the home. As you can imagine, zero house payments could drastically alter a person’s lifestyle in a positive manner and could do so almost overnight.

In regards to qualifying for a reverse mortgage, there is yet another benefit that is often over-looked: you do not need to verify your income since the loan is based on your home’s value. There are no payments to be made, remember? Essentially, you do not need any income nor do you need an outstanding credit report.

When reverse mortgages were first introduced, they allowed the lender to have a stake in the future value of the home. In essence, the lender would profit from your equity even if it extended beyond the original loan amount. Fortunately for seniors, times have changed for the better: regardless if your home goes up or down in value, you will never owe more than the loan amount or your home’s current value, whichever is lower.

Another question often asked is: can I outlive my loan? You can never outlive a reverse mortgage loan. So long as you are alive and living on the property, you will never have a mortgage payment for your reverse mortgage. Nor can a lender take your home away from you. As long as you live in your home, pay your taxes and insurance, you can live indefinitely in your home without making a single payment.

The amount of money that can be borrowed with a reverse mortgage is dependent upon many factors, including but not limited to: the age of the borrower, the amount of money currently owed on the home, the interest rate, the value of your home, and FHA’s lending limits for your area. Typically, the older you are and the less money you owe on your home, the more you can borrow. However, every situation is unique. To get an accurate, approved loan amount, you should speak with an approved reverse mortgage lender or broker in your local area. Do not be intimidated about contacting a loan broker! HUD requires that you speak with an approved, HUD counselor prior to any loan funding to ensure that you are fully aware of how a reverse mortgage works. You may call 1-800-569-4287 to acquire a list of FHA approved lenders for your particular area. They can also give you names and phone numbers for HUD-approved counseling agencies.

Reverse mortgages are truly designed to help seniors live a higher quality life. If you or someone you know is 62 years of age or older, you should take the time to find out about a reverse mortgage.

About the author:
Christian Rios is an x-loan officer for a major, US direct lender. He now specializes in educating home owners about available home loans. You can learn more about reverse mortgages here: angeles lender mortgage reverse. To learn more about traditional home refinancing, please visit: mortgage refinance information home loan refinance online. And if you're more interested in learning about a HELOC, please visit: compare heloc and refinancing.

Article Source: http://www.Free-Articles-Zone.com

Get best reverse mortgage rate with online lenders

By Antonio Redford [ 15/11/2007 ]

There are many seniors who dream to enjoy their old age but cannot realize their dream due to lack of finance; be it a vacation or renovation of old home, seniors need a large amount of money to work on any of their plans. In such situation when they do not have sufficient finance to make their dream true they usually go for loans that pester them more as they do not possess any steady source of income to repay that loan. In their old age when they cannot rely on someone to lend money, finding a suitable solution to sort out these financial problems is a better option. Usually, people do not consider mortgaging as a safe way to arrange money but in reality, at present there is no other reliable solution than reverse mortgage to get double benefits.

Especially for seniors who are struggling to meet their old age financial requirements it is like bliss. For seniors, there is a special mortgage facility as reverse mortgage that offer seniors an excellent opportunity to make their all dreams true. Reverse mortgage rate is affordable for every senior and provide every senior with freedom to spend the loan amount as per his or her choice. When a person is retired and live in his or her own home it can be very difficult for him or her to meet routine expenses along with emergency requirements as pension and saving do not provide enough income to reach up to the level of social security. In such situation reverse mortgage can be a beneficial tool to meet all these expenses.

If you are a senior with a home property then you are the right person to get benefit from affordable reverse mortgage rate. You can use you equity on home to get a reverse mortgage loan; all you need to do is to find out a reliable broker who is able to arrange best reverse mortgage rate for you. Though you can apply for that loan yourself but taking help of a broker will arrange most reasonable reverse mortgage rate for you; your broker will negotiate on behalf of you. If you are not sure about reliability of your broker then you can search on internet for most reasonable reverse mortgage rate. By finding a reliable online lender you will be able to compare services and interest rates of various lenders and once you get most beneficial deal you can apply for a quote to get the best deal.

Certainly, internet is a good way to get best deal in reverse mortgage loan with ease; with online lenders you will get everything arranged just through few clicks. After analysis of your application, the online lender will interact with you through phone to verify the details provided by you and will proceed further as fast as possible. Online application for reverse mortgage loans are becoming increasingly popular among senior as it help them in getting best reverse mortgage rate without stepping out of their home. Therefore, browse websites of reverse mortgage lenders and live your old age as per your planning.

About the author:
Antonio Redford is a legal expert. He gives advice to clients who are looking for expert counsel on reverse mortgage. For more queries about Reverse mortgages,Reverse mortgage rate visit on www.reverse-mortgage-seniors.com


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