Reverse mortgages are becoming an increasingly popular lending option for older Americans. Reverse mortgages allow homeowners over the age of 62, the ability to convert a portion of their homes' equity into cash, which they can receive in monthly installments or through a line of credit. This short article will provide a brief overview of the reverse mortgage process.
Reverse mortgages provide a sense of financial security for older Americans because they provide a supplement to social security income. Individuals may receive payments on a term, tenure or line-of-credit basis. Repayment of the loan is not required unless and until the home owner decides to sell the home, or no longer uses the home as his / her primary residence. When either of these two conditions are met, the homeowner is then required to pay back the cash they received from the reverse mortgage. Repayment of this type of loan also includes interest and other fees. The remaining equity, if any, belongs to the homeowner.
In order to be HUD eligible for a reverse mortgage loan, an individual must obviously own the home in question, must be 62 years or older, own the home outright, or have a mortgage balance low enough so that the mortgage balance can be paid in full at closing with the proceeds from the reverse loan. The individual must also go through HUD approved counseling. Single family homes, two or four unit properties, town homes, detached homes and some condominiums and manufactured homes are all eligible for a reverse mortgage.
Reverse mortgages can be a great option for older Americans. They provide extra income that often helps older Americans meet their financial needs. It is an extremely attractive option for individuals who plan to stay in their homes indefinitely, because the loan does not have to be repaid unless the individual moves out of the house.