Reverse Mortgage Info

　

Reverse Mortgage is a loan that is solely available for the retired persons or senior citizens to provide them a suitable source of income.Reverse mortgage gives them a way to get a loan against the equity in their home. Moreover the ownership does not get transferred and remains in the name of the borrower. The loan is not to be repaid as long as the borrower is alive or residing in the house and no monthly payments are required to be made. But when the owners change their main place of residence or die; the lender then becomes eligible for asking for the money to be paid back or could sell the property if the heirs fail to pay.
There is a specific eligibility criteria for choosing a reverse mortgage.According to the criterion, the person must be at least sixty two years old or older, the house for the reverse mortgage must be his primary residence. In the case of previous mortgage; the balance is required to be repaid with the funds obtained from reverse mortgage. As the ownership doesn't change, therefore borrower continues to be responsible for bearing the expenses like taxes, insurance, repairs and renovations etc. With the appreciation in the value of the house and passage of time, the borrower can apply for additional cash against the increased equity.
Another important thing to consider before applying for reverse mortgage is consultation. The borrower will have to discuss it with his family and with a financial consultant.The reasons why is that once primary borrower passes away, his heirs will be responsible for repaying the debt in order to inherit the property. Thus this should be a clear and factual dialogue to circumvent any future disagreements. To resolve this issue the borrower ought to maintain a life insurance policy that may be applied for paying the reverse mortgage following his passing away and doesn't trouble the heirs
One should perform an in depth analysis before finalizing the decision to obtain this loan. This option is not good for those who are in need of cash, have a plan to leave the home or have a short financial shortage, because they are going to have to undergo a heavy cost for closing. Such issues can be resolved by a simple home equity loan. Borrowers should carefully observe the merits and demerits of all the readily available options.Moreover, reverse mortgage is not the absolute best option for those who are in early retirement, because they will get lesser money as compared to the older applicants.