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What is a Reverse Mortgage?
If you have been asking yourself the question "What is a reverse mortgage?" you are not alone. There has been more and more talk about this unique loan product lately, and more and more people obtaining reverse mortgages.
Understanding Reverse Mortgages
What is a Reverse Mortgage? A Reverse Mortgage is a loan product created by the Department of Housing and Urban Development (HUD) in the late 1980's to allow Senior Citizens to retire more comfortably by borrowing the equity in their homes. At it's most basic definition, it's a type of home loan where the lender pays you, instead of you paying the lender. This is the main difference between the reverse mortgage and the traditional mortgage and is the reason that it has become known as the "Reverse" mortgage. The most popular reverse mortgage is the Home Equity Conversion Mortgage, or HECM. HECM Loans are administered and insured by the FHA (Federal Housing Administration) and it's completely safe.
Basic reverse mortgage requirements are:
- >> Borrowers must be Age 62 years or older
- >> Own their home and have enough equity in to qualify
- >> Occupy the home as primary residence
- >> Receive counseling by an approved HUD/FHA counselor
What is a Reverse Mortgage? It may just be the answer to your financial woes. Please read on. The best feature of a reverse mortgage is that the loan proceeds DO NOT HAVE TO BE PAID BACK, so long as the borrower lives in the home. This feature makes it perfect for seniors trying to retire on a less than sufficient nest egg.
Reverse Mortgage Payment Options
- >> Lump Sum Disbursement
- >> Monthly Payments
- >> Line of Credit
- >> A combination of the Above
For more information on what a reverse mortgage is, and other details, you may visit the page How does a Reverse Mortgage Work?. You are always welcome to Contact one our loan officers to find out if a reverse mortgage is right for you.
