Reverse Mortgages, What Are They?
Home owners aged 62 or older are converting part of the equity in their home into tax free incomes with out having to sell their homes. They don't have to give up the title to their homes or make new monthly mortgage payments. This is a new program and lots of people are having trouble understanding how reverse mortgages work. But for those who do understand it have taken the program and run with it. They use it to supplement their income, pay health bills, renovate their home or just have emergency cash on hand. What you have to know is that the bank doesn't give you money or take your house away.
1. Are reverse mortgages for desperate people? The absolute answer to this is no. Reverse mortgages are great tools used for financial planning for all kinds of people.
2. How do you qualify? You have to be 62, if both are going to be on the mortgage then both must be 62. You must have equity in your home.
3. What if I still owe money on my home? There is still a good chance that you will qualify but the balance of the first mortgage will have to be paid off with the new mortgage.
4. How much can I get? There are a lot of factors in answering that question. The age of your home, the value of your home, interest rates and your age at the time of closing.
5. Is it a monthly payment? No you can split it into any sort of combination. It can be a lump sum, line of credit, monthly payments or any sort of combination with those.
6. Will I have to pay taxes? The funds are tax free. It's your money and its not additional income.
7. Should I see a lawyer? It would be advised that you consider some sort of counseling before acquiring a reverse mortgage. It doesn't necessarily have to be a lawyer but it could be a good money manager.
8. Who owns the title? You still own the title.
9. What happens when I die? Once the home is passed on to your heirs then the mortgage becomes due. Your heirs can pay it and keep the house or they can sell the house to pay of the mortgage.
10. Can I owe more than my house is worth? Your repayment amount can never exceed the value of your home. On top of that there are absolutely no prepayment penalties.
11. What if I move? If you move the mortgage becomes due immediately and must be repaid in full.
Dale Mazurek
Related Tags: mortgage, credit, reverse
Dale has years and years of credit experiences and what he has learned is that the best way to start or rebuild credit is with a credit card. Dale can help you get a credit card suited for many different needs. Just go to http://stcajo.ecreditdirectory.com/ or check out 2 of his unrelated blogs at http://relationshiptidbits.blogspot.com/ or http://funtidbits.blogspot.com/
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