Reverse mortgage is the term which is quite familiar among the people that are taking mortgages on their house. Reverse mortgage is becoming more and more popular between people especially senior persons.
As everything have its pros and cons: reverse mortgage also have some advantages and disadvantages. Some of the advantages that you will get while taking reverse mortgage loan are you don’t have to pay any monthly mortgage payments and therefore no need to manage your account. You do not require any qualification loan and last but not the least you get cash out money upfront and still collect a monthly distribution of your equity.
On the other hand some of the disadvantages that you have to face while getting the reverse mortgage is you have to pay a higher closing fee in case of the reverse mortgage. Closing fees is the amount that the loan officer will charge you when you will close the deal. Closing fees is much lesser in case of the normal mortgage. In reverse mortgage you will get fewer options on the terms of loan and the most important thing that you have to qualify for the loan. There are certain criteria’s that you have to fulfill to obtain the reverse mortgage loan.
The loan is not payable and due until the borrower no longer owns the house as a main residence, e.g. the borrower passed away or the borrower moves out permanently or the borrower sells the house to some other person. If you desire to opt for a reverse mortgage on you current home you must be at least 62 years old and have a house that should be at least the category of condominium. There are no credit or income requirements required to qualify for the reverse mortgage loan. You might get eligible for reverse mortgage even if you still owe fund on your first mortgage.
On of the main benefit that you get from reverse mortgage is that it is “non recourse” which means that no problem how high the loan amount rises, the borrower never owe money that is higher than the home’s market value. The money generates form reverse mortgage can be used fore any thing: daily living expenses, estate tax and retirement planning, long-term health care, travel, education, pay-off of existing debts, prescription drugs and medical bills, house improvements and house repairs, daily living expenses.
