Reverse Mortgage Information Center

The reverse mortgage has been around since banks started loaning money, however, it’s rarely been used and many real estate and mortgage professionals are completely unaware of the principles of how it works.

However, when the economy took a severe hit, the housing market collapsed and the reverse mortgage became popular once again – probably more popular than ever before. When people started talking about it again, there were still many misconceptions as to the purpose and who would qualify. Many homeowners are saddened to learn that the minimum age for qualifying is 62 because this was originally started to help elderly on fixed incomes.

This type of loan is exactly what it seems: you are receiving payments instead of making payments. You can decide if you want one lump sum or payments made monthly.

Your lender will arrange for a home appraisal to determine its current value. Typically for homeowners who have been in their homes for decades, the home has significantly appreciated in value and even taking the recent housing collapse into consideration, the appraised value should provide a considerable amount of income ultimately.

After the lender receives the appraisal, they will then take your age into consideration. These two factors will help them decide your exact payment. Once your final payment amount is decided you can figure out if you want one large check or a series of monthly payments. Many people like the lump sum payment so they can invest the entire amount and hope for some type of return.

You can stay in your home for the rest of your life even though you aren’t paying your mortgage anymore.

The owners are still the legal owners. At death, their family can sell the home and pay the lender the value of the original mortgage. In the event that the home sells for less than the original value of the mortgage, a type of government insurance (which was paid for as part of the closing fees) pays the difference. There is no risk to the homeowners, or their beneficiaries.

When the time comes, your survivors (whoever will inherit your home) can sell your home and repay the lender. Again, you need to remember this is a real mortgage, a loan, that needs to be paid back. You didn’t sell your home to the bank, which is a common misconception.

With this type of mortgage, there are some pretty hefty fees and closing costs. Normally these can be deducted from the agreed to payment. Always have an attorney review anything you need to sign.

Find the best reverse mortgage information. Stop by Brian Anthony’s site where you can find out all about reverse mortgage articles and what they can do for you.