A reverse mortgage is a type of mortgage used by people aged 62 years and above to turn the equity in their home into cash. With a reverse mortgage, you will have to make any monthly payments. You will continue owning your home and receive cash whenever you need it.
As you receive cash, the loan amount will go up while the equity of your house will decline. The mortgage will never be more than the amount of equity of the house. A lender will not seek loan payment from anything else other than the value of the house.
Other assets you own and assets of your heirs are protected under what is known as a non-recourse limit. To qualify for this type of mortgage, you should be aged at least 62 years or more, you have to be the owner of the house, the home must remain your primary residence, should be in good repair and there should be no other liens on your home.
The amount of money you receive will depend on very many factors including the specific reverse mortgage program selected, the type of cash advances i.e. lump sum vs. monthly payment, the age of the individual that is the older the person the more the cash they get, and the value of the home.
The mortgage balance will become due if you sell your home, when you vacate it for more than 12 months or when the last surviving borrower passes on.
Before you choose a reverse home mortgage it is a good idea to consult an experienced reverse mortgage broker specialized in this type of mortgage.
They will help you answer the different questions regarding reverse home mortgages so that you will make an informed decision. A reverse mortgage could be the ticket to enjoying your life in retirement years.