Senior homeowners of 62 years of age or above would be entitled to avail reverse mortgage. However, it would be pertinent to mention here that you should be interested in availing reverse mortgage against your equity in your property. It is a great means to safeguard your equity in your property. You could avail reverse mortgage through Federal Housing Authority or private lenders. Such kind of loan would enable you to take benefit of equity in their home through tax-free income. The borrowed amount would be disbursed in lump sum, monthly payment or as a line of credit to be withdrawn as and when needed.
What makes reverse mortgage different from traditional loans
As with traditional loan, you would be required to repay the loan amount in agreed monthly instalments. However, with reverse mortgage, you do not have to repay the loan amount in monthly instalments. However, that does not imply that you would not be required to repay the borrowed money. The bank would sell the home on the completion of the loan tenure. It would be pertinent to mention here that the loan would not end until the senior homeowner moves out of the property, sells the property or dies. Therefore, reverse mortgage would not be due for times to come. The senior homeowner could benefit from the disbursed amount in the best manner possible.
Closing cost for reverse mortgage
Several kinds of closing cost would be associated with reverse mortgage. Some of these costs could be on the higher side, whereas some would be as low as less than $100. Some common closing cost would be inclusive of credit report, flood certification, document preparation and title insurance. The fee for these closing costs would vary based on their requirements. Credit report is necessary to meet the financial requirement, checking the delinquent debt to Federal Housing Authority. If you live in food prone area, you would need flood insurance taken care by flood certification. Document preparation would entail fee for preparing various documents related to reverse mortgage. Title insurance would protect the borrower and lender from costs over the owner of the property. It would depend on the loan amount.
Qualifications for availing reverse mortgage
Are you thinking of availing reverse mortgage? It would be pertinent to mention here that you should qualify the stipulated conditions for availing reverse mortgage. You should be 62 years of age or old and owner of the property. It would be sufficient to avail reverse mortgage. You could learn more on reverse mortgage by logging on to the official website.
Author Bio – Laura has been writing articles and blogs on different niches and topics for a significant length of time. She likes to share her all-encompassing knowledge on real estate and associated mortgages with her readers through her writings.