What is a Reverse Mortgage Reverse Home Mortgages Explained by Shawn Everett
In 1989 The Department of Housing Urban Development or HUD unveiled the reverse home mortgage plan. The intention was to release over 4 trillion dollars of first mortgage equity that seniors had built up over they years paying of their mortgages.
Seniors have recently shown great interest in obtaining these types of reverse loans. They are becoming more more popular now for seniors who would like to plan for retirement but might not have the liquid capital to do so comfortably.
Essentially a reverse home mortgage will pay you to stay in your home keeps paying as long as you remain in the home as a primary resident. With a reverse home mortgage seniors are able to freely spend these funds at their discretion.
With the Social Security system failing it more important than ever for seniors to access the equity in their home. In addition the cost of health care prescriptions continues to rise causing a heavy strain on the elderly population.
Over 12. 5 million seniors now own their homes free clean now have the ability to tap into these funds access them now without limitation.
On a normal mortgage loan the borrower would pay the mortgage company a monthly payment in which the interest is set over the life of the loan. With a reverse home mortgage that money is paid back to the homeowner by the bank if the form of a monthly payment a single lump sum payment or a line of credit.
You are not required to pay this back until the homeowner no longer resides in the home. If you move or sell the home the funds you received through the reverse loan would come directly out of the homes equity upon the completed sale. The loan does not need to be paid back as long as you live in the home.
You will never owe more than the equity that you have in the home. Therefore you will never be paid more than the home is worth.
Most seniors use these funds for living expenses home improvement medical payments or prescriptions or to help make their retirement more comfortable.
With a reverse home mortgage you can have the security knowing that your bills will be paid that the effort you put in for years paying off your home will now benefit you in your senior years ahead.
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