A reverse mortgage is a way to borrow money against the equity in your home to provide you with tax-free income. You can receive funds in any number of ways including:
Regular monthly payments for as long as you live (or reside in your home)
Monthly payments with a pre-determined cut off date
A line of credit to draw on when you need it
or a Combination of these
A reverse mortgage can enable you to enjoy retirement more, provide some financial cushioning for future emergencies or major expenses, while, allowing you to remain in your home and keep title to it. Being more complicated than a conventional mortgage, a reverse mortgage carries some pros & cons and has different qualifying requirements for borrowers. The most notable requirement is that the youngest borrower must be at least 62 years old when the loan closes.
Some other requirements are that the home must be your primary residents and remain so during the term of the loan, and that existing loans, or mortgages be paid off prior to closing on the Reverse Mortgage. (reverse mortgage funds can be used for this according to cash advance rules).
If you choose to, you can even pay off a reverse mortgage early by refinancing out, or just settling up with the lender. If you should pass away before the loan is paid, your heirs can choose to pay off the loan or sell the property, any proceeds above the loan amount of your home goes to your heirs.
applying for a reverse mortgage is easy, and you can start online. The National Reverse Lenders Association website is a good starting point to gather information from lenders. The URL is http://www.reversemortgage.org/ .
Team Results also has a 12 page pamphlet available that covers in detail all aspects of reverse mortgages. We'll gladly mail a copy or e-mail an electronic version at your request. Send requests to TeamResults@Century21.com. Be sure to include your preferred delivery method.
© 2007, John Wall, all rights reserved.