These mortgages are made available to individuals 62 years old or older to free up a bit of of the equity in their real estate to use as they desire. This can be carried out either through a lump sum payment or through regular payments. There is also a third alternative and that is to reserve the money as a home equity line of credit.

Most any homeowner that are 62 can qualify for a reverse mortgage. A job is not needed because the recipient will not be making payments. In the identical respect, creditworthiness is not necessary because the equity is already built up in the dwelling and is not being repaid until the house is sold or the owner is deceased.

Reverse mortgages are growing in popularity as retirees are seeking opportunities to complement their retirement income. A reverse mortgage gets its name from the actions of taking or reversing the equity in the home rather than building the equity.

Here are a few of the benefits to having a reverse mortgage:

*Reverse mortgages give additional financial security to seniors after they have retired. The funds are also available for unexpected expenses, medical expenses, house upgrades, a vacation or anything else that may be necessary or desired.

*There are no payments required while you are residing in the home.

*There are no revenue taxes paid on the proceeds of a reverse mortgage. A reverse mortgage will not interfere with Social Security or Medicare.

*You will keep ownership of your house as well as preserving your independence.

* Reverse mortgages are insured by the FHA (Federal Housing Authority) or guaranteed by Fannie Mae.

*Most important, reverse mortgages give a monthly income after retirement offering financial independence and peace of mind.

There are a lot of reasons to consider a reverse mortgage, but ultimately you have to come to a decision if this is what is in your best financial interests. Independent credit counseling is required before a reverse mortgage is granted to ensure that the applicants fully recognize everything that is involved in a reverse mortgage.

Finding all about a reverse mortgage can be done by contacting an honest lender. They will answer all your questions and explain alternatives that may also work for you. A reverse mortgage can help you unlock the equity that you have in your home and help you get financial security.

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About Reverse Mortgages – Learning The Basics is from Reverse Mortgages Pros And Cons

Single-purpose reverse mortgages are, as the name implies, designed for a particular purpose as specified by the nonprofit or government lender. This might be for property taxes, home improvements or repairs. In order to qualify for these loans you generally have to have low or moderate income and they are not available everywhere. But if you can qualify for one, you will enjoy the lowest possible loan costs.

HECMs and proprietary reverse mortgages have no income requirements and can be use for any purpose  but are usually the most expensive. This may not be a problem if you intend your current home to be your final residence but if you plan on moving within a short time, this probably is not the way to go.

You are required to meet with a government approved hosing counselor before applying for a HECM. The counselor will explain all of the financial implications of the loan and point out alternatives to you. The counselors charge a fee for this service which is dependent upon your income, but will not be more than $125.00 (currently).

Several factors determine the amount of the money you can borrow through a HECM or proprietary reverse mortgage. These include including your age, the type of reverse mortgage you apply for, the FHA appraised value of your home, current interest rates and where you live. As a general rule, the more your home is worth, the less you currently owe on it and the older you are, the more money you can get through a reverse mortgage. The AARP has a free reverse mortgage loan calculator that is easy to use.

The HECM gives you options as to how you receive funds from a reverse mortgage.  Options include a fixed monthly cash advance for a certain period or for as long as you stay in your home. You can also opt for a line of credit and then draw on this credit line as you choose. You may also select a combination of these methods.

HECMs will usually provide for a larger loan advance at a lower total cost when compared with proprietary loans. But higher-valued homes may provide the owner with a larger loan advances with a proprietary reverse mortgage.

There is only one way to find out which of the available reverse mortgage loan program is right for you. Shop and compare. And don’t be afraid to deal with a company you find online. We did and saved hundreds of dollars in costs.

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Reverse Mortgage Types And Benefits is from Reverse Mortgages Pros And Cons