What is a Reverse Mortgage?
The reverse mortgage is basically a loan that is meant for homeowners who have age of at least 62 years old. It makes it possible for homeowners to be able to get cash from their home equity. When a person ages, there is no doubt that he/she will have a high chance of getting limited income. Reverse mortgages therefore enables retirees to be able to get extra cash from the accumulated wealth that is in their homes. They will use this loan to cater for their day to day spending. The good thing about reverse mortgages is the fact that those who borrow are not restricted on how they should use it. Click for info on in home equity plans.
Why reverse mortgage is called so? The reason is because the payback stream used in ordinary mortgage is not applied here. In traditional mortgage the mortgage borrower will always pay the lender after a specific amount each month. In reverse mortgage, it is the lender who pays back the borrower. Paying back for this loan is not breathtaking because you will only have to do that when the home is vacated or it has been sold. The loan balance shall not be paid every month if you are still residing in that house. Your condominium fees if you reside there, homeowners insurance and property taxes just but a few must remain up to date during this time.
The laws of jurisdiction usually determine the terms and conditions of this home loan. If it happens that you don’t repay the loan on time, the remaining loan balance will be subjected to some interest. When the loan balance surpasses the value of your home, you will not be forced to pay an additional amount. As a consumer, you are advised to get detailed information about this specific loan before you decide on it. This will help you make right decisions that will not harm you.
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