Reverse Mortgages

Reverse mortgages have been around for some time and have become increasingly popular among older homeowners.

Glendale, CA (prHWY.com) August 6, 2011 - News Release

Reverse Mortgage

Glendale, California--August 6, 2011 -- Reverse mortgages have been around for some time and have become increasingly popular among older homeowners. The program allows a homeowner aged 62 or older to access the equity in their home, without actually making monthly payments to repay the loan. Unlike a conventional second mortgage or home equity line, the money is paid back to the lender only after the death of the borrower, when the house is sold.

The advantages are clear - a reverse mortgage allows an eligible homeowner to borrow money without having to pay it back; the amount that can be borrowed depends on the value of the home. The money received is not taxable and there are no restrictions on how it can be used. Money obtained from a reverse mortgage can be accessed in a lump sum, a credit line, or a combination of the two, depending on the borrower's needs.

There are few restrictions to the program and there are no requirements concerning the health or income of the borrower; there is also no credit check. A borrower does need to own their home outright to qualify. As of now, the maximum loan amount is $625,000, although it is likely this figure will change. A reverse mortgage may not be the best option for a homeowner who is planning to move within the next few years.

Reverse mortgages may not be the best solution for everybody, although it is a convenient and easy way to access the equity in a home. There are over 300 members of the National Reverse Mortgage Lenders Association, although the two biggest lenders, Wells Fargo and Bank of America, both recently pulled out from the program. The cost to take out a reverse mortgage is now less than it was, as most lenders have eliminated or lowered their loan origination fees.

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Tag Words: reverse mortgage

Categories: Finance

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