Reverse Mortgage Loan Option
The reverse mortgage loans have been around for over 55 years helping seniors to access their home equity they have accumulated over the years and defer the payment of the mortgage loan until they either die, sell, or move out of their home. Being able to tap into the equity of a home in the later part of life provides seniors with flexibility to plan for retirement. Also, seniors can ease their mind when unforeseen health issues arise, knowing they have the funds necessary to stabilize their health and maintain a high standard of living.
The three basic requirements for a borrower qualifying for a reverse mortgage Loan are; the borrower must be the minimum age of 62, the home must be a primary residence, and the home must have sufficient equity. There are certain properties that do not qualify for a reverse mortgage such as vacation homes or secondary homes since they are not considered to be a primary residence. If the property is on an income producing land such as a farm, then the property is also not eligible. The reverse mortgage Loan adheres to the U.S. Department of Housing and Urban Development (HUD) guidelines when evaluating the criteria for a primary residence.
The reverse mortgage loan is an equity solution and therefore, credit approval is not required. This is a wonderful option instead of rigid conventional loan requirements that focus on income and debt ratios in order to qualify. Now seniors have a mortgage solution that works with them instead of against them during the later years in life. The home owner is still required to pay their property taxes, home insurance, maintenance of the home, and any other property payments such as Home Owners Association (HOA) fees related to their loan for the life of the loan. Otherwise, the home owner could be in risk of defaulting on the loan.
The reverse mortgage loan process is simple and there are a few options, once the loan has been approved, on how the equity can be distributed to the home owner. The bank can distribute the equity in the form of a Home Equity Line of Credit (HELOC), which is a lien that is attached to the title of the borrower’s primary residence and acts similar to a credit card. Cash withdraws can be taken from the (HELOC) using a check book and/or a debit card which is issued to the borrower at the close of the loan by the financial institution. Another option available for distributing the equity is either a lump sum amount or monthly payments based on the borrower's preference.
Drop by and visit your local financial institution and find out if your property qualifies for a reverse mortgage loan. Become one step closer to experiencing a simple loan process that enables access to equity without having to sell your home or increase debt. Many home owners have benefited greatly from this option and have achieved a better quality of life.