Reverse Mortgage Financial Help: A Primer

Do you worry about how you will afford to retire?

If you own your home, a source of retirement cash might be right at your fingertips with this Reverse Mortgage Financial Help.

To access it, all you have to do is apply for a mortgage. But a traditional mortgage may not be right for you.

Instead, you may need the financial help that only comes from a reverse mortgage.


What is Special About a Reverse Mortgage?

There are several things about a reverse mortgage that are special, but the most important is what makes it “reverse.”

That is, the mortgage can continuously paying you, rather than you having to make payments toward your mortgage balance.

That is because you can set up the loan terms so you receive installment payments, and there is no set date on which you have to pay those funds back.


When Can You Get a Reverse Mortgage?

You can get a reverse mortgage when the home is your main residence and you own it.

That means properties without structures do not qualify.

Nor do properties you do not live on or only stay at occasionally, such as for vacations.

You must also be a minimum of 62 years of age to qualify.

Also, the home must have value available to borrow from.


Does a Reverse Mortgage Require You to Receive Monthly Installments?

Monthly installment payments is a popular way to receive reverse mortgage funds.

Setting up your loan agreement that way can help you pay monthly costs of living.

However, when you sign your reverse loan contract you can request to receive your funds in a different manner.

One way to do so is by asking for a single large payment similar to what you typically can receive when taking out a traditional home mortgage.

Another is to draw from your available funds as a line of credit, which works similarly to spending up to a certain limit on a credit card.


What Are the Government Reverse Mortgage Rules, Regulations and Sources?

One thing you need to know before applying for a reverse mortgage is they are government-regulated to a degree.

For example, by federal law, you cannot borrow the full amount of home equity your home currently has.

Such rules exist to provide protections for banks and borrowers.

You should also be aware that some reverse mortgages are actually insured by the federal government.

Those are mortgages offered through federal organizations like the Department of Housing and Urban Development (HUD).

Government-issued reverse mortgages are often referred to as home equity conversion mortgages (HECM’s).


When Does a Reverse Mortgage Loan Period End?

Although there is no set repayment schedule for a reverse mortgage, the loan period is not infinite.

Instead, it is somewhat undefined, at least at first.

While a traditional home loan might last for an exact period like five years, a reverse mortgage lasts for as long as you take to pay it off or as long as you remain in the residence.

You have to pay it back when you move out, if you have not yet done so.


What Happens if You Cannot Repay a Reverse Mortgage?

There are certain protections in place, even if you cannot repay a reverse mortgage.

For example, any other property you own, such as your vehicle, is completely safe.

However, if you cannot make full loan restitution, the home can be sold.

After the sale, you retain any leftover funds beyond the loan balance.

If no such funds exist, any remaining loan balance is no longer applicable to you.


The Final Word on Reverse Mortgages

Is a reverse mortgage helpful or not.

The final word is it depends on your situation.

It can be quite helpful, as long as your home has enough equity and you intend to live in it for a long time.

If so, you may be able to spend many of your golden years living life financially stress-free.


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