Home > Business & Finance > Renting & Real Estate > How does reverse mortgage works?

How does reverse mortgage works?

  • Answers
  • No idea
    nathan · 0 0
  • A reverse mortgage work for some while not practical for others. If you are over your head in debt and in need of funds for any reason, such as replacing a car or other major household appliances, or you need major repairs on your house that you want done. If the current mortgage payments are now a financial burden, you might consider a reverse mortgage.

    If you are not facing such a major financial crises, you might not need or want a reverse mortgage.

    You have to see if there is a financial advantage or dis advantage in your applying for and being approved for a reverse motgage.
    In applying for a reverse mortgage, you and your house must be qualified to be approved for this type mortgage.

    #1. You must be at least 62 years of age. If you are married one of the spouses must be at least 62 years of age.

    #2. Your mortgage amount you would be approved for would be based on the appraised value of your house. Normally you would be able to receive up to 80% of the appraised value of your house, minus any current mortgage loan you have on the house.

    #3. You house must be in good condition, and need no major repairs of the property.

    #4. You are required to pay your county property taxes each year.

    #5. You are required to maintain the proper hazard insurance paid annually

    #6. You would not be required to pay a monthly mortgage payment for this reverse mortgage loan.

    #7. You and your spouse are able to reside in the house until you are both deceased,even if one precede the other in death. The survivor is able to remain in the house, until their death.

    #8 This house must be your primary place of residence, and you must remain in the house as your primary residence. You are not able to rent this for any reason. If you do rent the house, this is reason for the mortgage lender to immediately call your mortgage loan immediately due and payable.

    If you are approved for this reverse mortgage loan. you may

    #1. Receive all the money at one tine, in one lump sum.

    #2. Receive the money over a designated period of time you select.

    You are not restricted as to what you do with your funds. If you select to pay off credit card debt or other debt, you would be required to pay these debts at the close of your transaction. The title company or closing escrow company would issue you a check in the name of the debt you would want to pay off.

    3. If you have heirs that want to keep the house, once you are deceased, they would be required to pay the reverse mortgage off. This type mortgage loan is not automatically assumable as conventional, FHA, VA or USDA mortgage loans are.

    I hope this has been of some benefit to you, good luck.

    "FIGHT ON"
    loanmasterone · 0 0
  • if you aren't worried about leaving your house behind to someone & you need the extra cash it could benefit you.. just have to watch the interest rate that is accumulating on it to see if it makes sense to do.. I considered it to pay off my existing mortgage but my current rate is 3.1. doesn't make sense to pay any more interest than that on a reverse mortgage so I chose not to do it.....
    lynn · 2 0
  • It "works" for the bank.
    lazlo_dei · 6 4
  • Lets say you outright own a house worth $240,000. The bank will give you $1000 per month and the mortgage simply grows. After the first $1000 payment the mortgage balance is $1000 plus expenses to start the mortgage, let say $5000 total. After the 2nd month the balance is ($5000 balance from prior month plus new $1000 payment) $6000 plus interest on the balance from the prior month. Mortgage keeps growing like this until the balance starts to approach worth of the house and then the bank stops sending checks and may demand repayment of the mortgage per the terms of the original contract.
    BullRooster · 3 2

You may also want to know

  • How do reverse mortgages work?

    ...loan against your home that you do not have to pay back for as long as you live there. With a reverse mortgage, you can turn t...

  • How does a reverse mortgage work?

    ...sell. If you are working with the bank and make a good...the senior didn't need to do a loan, then that would be the...inheritan...

  • how reverse mortgage work?

    ...more specific information: http://www.bills.com/hecm/ http://www.bills.com/how-does-a-reverse-mortgage-work/ ...

  • How do reverse mortgages work?

    ... than going right to the source for information. Over 90% of reverse mortgages are known as Home Equity Conversion Mortgage......

  • How does a reverse mortgage work?

    ... the heirs decide they did not want or could not afford the house...property, such as foreclosure. A reverse mortgage is an...

  • How does a reverse mortgage work?

    How does a reverse mortgage work? A reverse mortgage is a federally-...the borrower. Some adv...

  • How does a reverse mortgage work?

    ...loan against your home that you do not have to pay back for as long as you live there. With a reverse mortgage, you can turn t...

  • How does a Reverse Mortgage Work?

    ... about the application process, or how it compares to regular (forward) loans, or ??? A reverse mortgage (RM) is a loan. ...

  • how does a reverse mortgage work?

    ... situation, my first instinct would be to recommend you not get a reverse mortgage right now. Maybe later it can make more sense. ...

  • How does reverse mortgage work?

    ... are made on a reverse mortgage until the borrower moves or the...the bank sends a check (or does a direct deposit) to the hom...

Amazon Ads