Reverse Mortgage Lenders

In a world where economic times are getting harder with every passing day, retirement benefits are hardly enough to meet daily living expenses. When long-term medical care costs are added to this, retirees have a difficult time meeting these needs. Reverse mortgage is a financial product that was developed to allow homeowners aged 62 and above to convert the accumulated equity in their home into cash. In this way, they can use such extra income in meeting their monthly expenses as well as pay for long-term health care in case they need it. Unlike traditional loans where the borrower has to pay the lender in regular installments, reverse mortgages involve the lender making payments to the borrower under a structure that the borrower deems to be suitable for them. The top three reverse mortgage lenders are Finance of America Reverse, Live Well Financial and Liberty Home Equity Solutions. Keep reading to learn the top questions about reverse mortgages, so you can find the option that works best for your needs. 

 

Frequently Asked Questions ( 8 )   Add a Question

  1. What reverse mortgage features matter most?
    Reply

    There are a number of features to look out for when taking out a reverse mortgage. First, the debt limit refers to the sum total of debt that the borrower incurs. Second, home ownership means that the borrower should own the home outright. Third, there are financing fees, which are based on the costs of providing the loan as well as the home equity. Other important features are right of cancelation, repayment requirements and loan amounts.

    Best Answer
  2. Who does reverse mortgage target?
    Reply

    Reverse mortgage is designed for senior citizens aged 62 and above. For such people to qualify, they must be homeowners and must continue living in that home after taking out the loan. The financial product will also be helpful in cases where such seniors need extra income to meet their financial needs, want to enjoy their golden years or expect the value of their home to rise over time.

    Best Answer
  3. How much money can one get for a home?
    Reply

    Several factors are used to determine the amount of money that a borrower can get. In situations where a person has attained the age of 62 but their spouse is below 62 years of age, the age of the eligible non-borrowing spouse will be used to determine their loan amount. Other factors include the current interest rates, the FHA mortgage limit, less of the appraised property value and the sales price.

    Best Answer
  4. What types of homes qualify?
    Reply

    The homes that qualify for use as collateral under reverse mortgage are single family or multi-family homes. Also, condominiums and manufactured homes also qualify under the program. In case one is not sure whether they can use their home to get a reverse mortgage, they should contact their preferred reverse mortgage provider for more information.

    Best Answer
  5. Will one still have an estate to leave to their heirs?
    Reply

    When the hone is no longer used as the primary residence or is sold, part of the proceeds will be used to pay for the outstanding amount of the loan, the interest as well as the finance charges. Any proceeds that are left will be passed on to the surviving spouse or chosen heirs. The heirs can also choose to pay the outstanding amount of the loan and retain ownership of the house upon the death of the original owner of the home.

    Best Answer
  6. What are the benefits of a reverse mortgage?
    Reply

    The extra income obtained through a reverse mortgage can be used to meet the costs of long-term medical care, to renovate or make repairs to the home, to settle any outstanding taxes or debts or to go on vacation for those who want to enjoy their golden years. Other benefits of the financial product are that the government insures it, the income received in this way is not taxed and there are no penalties as a result of prepayment.

    Best Answer
  7. What if one has an existing mortgage?
    Reply

    One will still be eligible for reverse mortgage provided they have a low balance on their existing mortgage. However, the existing debts must be paid off. One can choose to settle the outstanding amount using proceeds from the reverse mortgage, by using money from their savings or by getting assistance from a friend or family member.

    Best Answer
  8. How does one receive payments?
    Reply

    There are a number of payment plans from which a borrower can choose. These are tenure, term, line of credit, modified tenure, modified term or lump sum.

    Best Answer