October 10, 2008 - Basically, a company takes the equity you have in your home and begins to make payments to you on a monthly bases. There are many pros and cons to this (although I am not sure of ...
Responses:
Hello, ... ... A reverse mortgage is a loan that enables senior homeowners, age 62 and older, to convert part of their home equity into tax-free income without having to sell their home, give up title to it, or make monthly mortgage payments. The loan only becomes due when the last borrower permanently leaves the home.- A reverse morgage is: ... ... egagrom
Reverse mortage is a type of loan suitable for aged people who live in their owned houses and have a need for regular financial income. ... ... When a person enters into a reverse mortage agreement with a bank or any financial institution he/she will be pledging the property as colateral security for a loan which is paid to him/her in periodic instalments. The amount of loan is proportional to the market value and asessment of growth of value. When the person dies the lender recovers the loan by acquiring the property which is pledged. The benefit to the lender is from the value appreciation of the property.
A reverse mortgage (known as lifetime mortgage in the UK) is a type of loan available to seniors (62 and over in the US), used as a way of converting their home equity (the value of the home, minus the amount of any existing mortgages) into one or more cash payments while retaining ownership of the property (continuing to live there) and avoiding monthly payments. Repayment of the loan is deferred until the borrower is no longer living in the home. ... ... In a typical mortgage, a home owner pays a monthly amortized amount; after each payment, the owner has more equity in the house. After a certain amount of time (typically 30 years), the mortgage will be paid in full and the property released from the debt. In a reverse mortgage, the home owner pays nothing each month and all interest on the debt is added to the lien on the property. If the owner receives monthly payments, then the debt on the house increases each month. ... ... If a house gains significantly in value after a reverse mortgage is taken on it, it is possible to get a second and even third reverse mortgage to borrow against the increased equity that the owner now has in the more valuable house. But, in the United States a reverse mortgage must be the first and only mortgage on the property (if there is an existing mortgage, it will be paid off with some of the proceeds from the reverse mortage). In the United States, if the property increases in value (and as the mortgagee ages and qualifies for more money), the reverse mortgage may be refinanced to borrow more against the increased equity. ... ... http://en.wikipedia.org/wiki/Reverse_mortgage- gjhgut
Basically, a company takes the equity you have in your home and begins to make payments to you on a monthly bases. There are many pros and cons to this (although I am not sure of all of them). You are allowed to stay in your home. When you pass away the home becomes the reverse mortage holders. You get extra cash in your golden years. It is doubtful that the value of your home will ever be returned.
Knowledge Base: Mortgage
Reverse mortgage?
October 10, 2008 - Category: Mortgage
i have found there is a ton of misunderstanding around reverse mortgages. 1. what do you think a reverse mortgage is? 2. how do you think it works? 3. why do you think it is good / bad? you must answer all three to be considered for best answer. reverse
Reverse mortgage »
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Is there a reverse mortgage available for people less than 62 years old?
what is a reverse mortgage and how do people benefit from them?
