1 Minute Recap of a Reverse Mortgage
So often, people ask me, "What is a Reverse Mortgage." My brief answer about how a reverse mortgage works is this:
Someone qualifies for a Reverse Mortgage
- When they are age 62 or more
- Own their own home or buying a home
- It’s their primary residence
- Beginning November, 2011 lenders may have financial and credit qualifying guidelines.
This is it for the Reverse Mortgage requirements. They can then take tax-free money out of the home without making monthly payments.
That is sort of the reverse of it; we are paying them rather than them paying us.
They do pay us back when they
- Or pass away
They can then take money out of a Reverse Mortgage in three ways.
- They can take a lump sum; meaning all the money up front. We use this choice when the borrower has an existing mortgage or equityline. That has to go away as part of the process.
- They can choose a line of credit; sort of like a jumbo credit card that they can draw from as needed but only are charged interest on the part they actually use.
- Or they can take monthly payments.
- Or they can take a combination of all three.
- The exception is to the fixed rate choice (which has only appeared in the last couple years) which requires them to take all the funds up front and begin interest rate accumulation on the full amount immediately.
Would you like to receive a detailed quote on how much money you could receive in a Reverse Mortgage. Please use my Quote Request Form